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    • As of 4 p.m. ET DJIA 11382.09 À 0.17% FTSE 100 5745.32 g 0.39% Nikkei 225 10178.32 À 0.10% Shanghai Comp. 2842.43 g 0.04% Hang Seng 23320.52 g 0.55% Sensex 19966.93 g 0.13% S&P/ASX 200 4694.22 À 0.38% OPINION: Beauty of the deal: Coty seeks Probing the Chinese skin-care company man in charge BOSS TALK Page 22 of the TSAKKDN PPS 648/11/2010 (028507) Malaysia: RM6.00, Pakistan: Rs140.00, Philippines: Peso80.00, Singapore: S$4.00(Incl GST), Sri Lanka: Slrs180(Incl VAT), Taiwan: NT$60.00, Thailand: Baht50.00, Vietnam: US$2.50 Australia: A$6.00(Incl GST), Brunei: B$7.00, China: RMB25.00, Hong Kong: HK$18.00, India: Rs25.00, Indonesia: Rp18,000(Incl PPN), Japan: Yen500(Incl JCT), Korea: Won2,500, Page 14KKDN PP 9315/10/2010 (025811) VO L . X X X V N O. 6 9 * * Monday, December 6, 2010 ASIA (India facsimile Vol. 2 No. 130) Thailand celebrates King Bhumibol’s birthday U.S.-KoreaMICA (P) NO. 164/10/2010 pact fortifies relationshipSK. MENPEN R.I. NO: 01/SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998 BY EVAN RAMSTAD The pact, which requires legislative approval in both SEOUL—The U.S. and countries, is the largest by South Korea over the week- value of trade volume any- end finally finished reshaping where in the world since the a sweeping free-trade agree- North American Free Trade ment that had been stuck in Agreement took effect in 1994 legislative limbo since 2007, involving the U.S., Canada and making compromises that Mexico. drew some political criticism U.S. President Barack here over fairness but not Obama said it would support enough to harm the likelihood at least 70,000 American jobs, of ratification. an important selling point as Trade Minister Kim Jong- he pushes for ratification in hoon, in a nationally televised the U.S. Congress. news conference that lasted The floor speaker of South more than an hour, on Sunday Korea’s opposition party de- rejected critics who, before rided the revised agreement hearing details, were accusing as an “economic attack” and a his negotiating team of caving “humiliation.” But leaders of in to U.S. pressure in the re- the ruling party, which con- vising the agreement. trols 171 of the 299 seats in He also denied acting too parliament, endorsed the swiftly to make a deal in the changes and said ratification aftermath of a North Korean is likely. attack on South Korea, an The U.S.-South Korea deal event that prompted Seoul to doesn’t open every economic look to Washington for reas- segment in either country. But Reuters surance of their decadeslong it is expected to boost two- defense alliance. Please turn to page 18 Thailand on Sunday marked the 83rd birthday of King Bhumibol Adulyadej, who called for unity and hard work to keep the country “I only negotiated this on happy and prosperous in the face of political conflict. The king appeared at Siriraj Hospital in Bangkok, above, before attending a the basis of economic princi- North Korea increases its ceremony at the Grand Palace. He was admitted in September 2009, but there has been no detailed explanation of his hospitalization. ples,” Mr. Kim said. criticism of the South ............ 5 Diplomatic disclosures India presses for access to key BlackBerry data More energy, BY AMOL SHARMA take a little time, because it’s continued, with its govern- a new technology.” ment citing heightened na- fewer emissions. NEW DELHI—India’s gov- The secure nature of tional-security concerns as ernment is in discussions with companies that use Re- BlackBerry’s corporate, or en- terprise, email service has reasons for needing to unlock encrypted messages. With technology search in Motion Ltd.’s Leaked U.S. diplomatic cables BlackBerry to gain access to been one of its chief selling points for business and gov- RIM has maintained that only its corporate customers we can do both. shed new light on the their employees’ secure com- ernment users. But that fea- have the ability to unlock se- munications when seen as ture has been problematic for cure email messages, and now To meet growing demand, the world climate of tension between the U.S. and China over a necessary, said a top Indian countries that say they can’t India has initiated talks with will need all economically viable massive rupture between official. intercept BlackBerry commu- some of those companies. energy sources—while also mitigating Google and the Chinese Home Secretary G.K. Pillai nications. “We’ve had a round of emissions. ExxonMobil is developing government. Page 3 also dismissed reports that RIM has been engaged in a meetings with the compa- the smartphone maker’s ser- high-stakes tug of war with nies,” Mr. Pillai said. He technologies to help address this vices will be blocked if the various countries including added that their response has challenge today and for the future. India government’s demands aren’t met by the end of January. India, Saudi Arabia and the United Arab Emirates, which been, “ ‘If you tell us you’ve got a suspect from our com- Learn more at A decision over whether to “We’re trying to find solu- had threatened to ban Black- pany who is a national secu- approve a South Korean- tions where everybody’s in- Berry services that they rity issue,’ ” the company will owned steel plant could terests are in one sense pro- couldn’t monitor. RIM settled provide the necessary access. define Indias future. Page 4 tected,” Mr. Pillai said during with some countries, but ne- Mr. Pillai didn’t say which an interview. “It’s going to gotiations with India have Please turn to page 18
    • 2 * * THE WALL STREET JOURNAL. Monday, December 6, 2010 PAGE TWO What’s News— Inside i i i Business & Financen Miners are banking on pro-longed strength in the commodi-ties market, as the companies buyother miners or launch joint ven-tures. The deals range from goldto coal and stretch from Canadato China as mining companiesmove to quickly snare limited re-sources and develop new ones. 20n The bond market is stumblingafter a stellar two-year run. Moreinvestors are betting that stocks Business & Finance:will post better returns in the Examining AIG’s plancoming months. 19 to sell Nan Shan. 19n Top U.S. Senate lawmakerssaid they believed they werecloser to a deal that would keepthe Bush-era tax cuts from expir-ing at the end of the month. 8n China next year will shift mon-etary policy to “prudent” from thecurrent “moderately loose,” codi-fying a transition that has takenplace over several months. 5n The WTO condemned EU anti-dumping tariffs on imports of Chi- Xinhua/Zuma Pressnese screws, handing Beijing itsbiggest legal victory yet at the Markets: A big factorGeneva-based body. 6 behind gold’s rally?n Indian banks need to cut lend- Buying from China. 32ing rates and raise rates for de- Malaysian police fired tear gas Sunday to disperse 4,000 people at an opposition-backed rally against the government’spositors to help the economy involvement in a dispute over drinking water. Police said 48 people were arrested and being investigated for illegalgrow faster, the head of the coun- assembly. The dispute is over a proposed water-treatment plant for Selangor state, which the federal government wantstry’s central bank said. 6 built. The opposition People’s Alliance, which runs the state, says it has enough water to meet demand until 2019.n Cathay Pacific CEO Tyler will n India’s attorney general asked n North Korea maintained its ahead of a new round of talks onstep down next year. He plans to the supreme court to force Dow barrage of criticism at the South that work with world powers.succeed Bisignani as head of IATA, Chemical to pay an additional $1.1 and the U.S., saying Seoul didn’tthe global airline industry’s main billion in compensation and costs learn a lesson from the North’s at- n Spanish airports were operat-lobby group. 21 related to an industrial accident tack last month. 5 ing at normal levels Sunday after that killed and injured thousands a 24-hour strike by air-traffic con-n The engine explosion on a Qan- of people in Bhopal in 1984. 23 n The Pakistani-American who trollers caused travel chaos fortas flight is prompting new con- pleaded guilty in U.S. court to aid- hundreds of thousands of people.cerns about pilots’ increasing reli- n The euro is at risk of losing ing the 2008 Mumbai terrorist at-ance on cockpit automation. 21 more ground this week as the tacks identified voices of some n A British lawmaker said his Irish Parliament votes on an aus- key conspirators in the shooting Russian assistant is facing depor-n Google’s bid to buy local deals tere 2011 budget. 24 spree, an Indian official said. 4 tation as a suspected spy. In Depth: Oil-rigsite Groupon ended as the twosides broke off talks. 23 i i i n An explosion caused by ille- n Japan confirmed an outbreak inspectors left adrift World-Wide gally stored chemicals killed seven of a high-risk bird flu but said in reform push. 16-17n Samsung Electronics promoted people and injured 37 at an Inter- there is no evidence the diseasethe chairman’s only son to presi- n Leaked U.S. diplomatic cables net cafe in southwestern China. has spread beyond chickens. 6dent from executive vice presi- are shedding new light on thedent. Jay Y. Lee also will retain rupture between Google and the n Iran claimed another advance n Israeli officials said a foresthis chief operating officer role. 20 Chinese government. 3 in its disputed nuclear activities fire in the north is under control. ONLINE TODAYMost read in Asia China Real Time Continuing coverage India Real Time ‘Foreign firms are in French President fact discriminated Nicolas Sarkozy On Other Fronts: Thai against in this began a four-day trip soap operas make it market.’ to India over the big in China. 121. China’s Web Takes On a Luxury Former U.S. Trade Representative Susan Schwab speaking about the weekend, touring the THE WALL STREET JOURNAL ASIALook2. Beijing Acts to Combat Inflation state of trade relations with China. Taj Mahal ahead of Dow Jones Publishing Company (Asia) 25/F, Central Plaza, 18 Harbour Road, Hong Kong Tel 852-2573 7121 Fax 852-2834 52913. A Family Compound4. Obama Shows Openness To a official meetings. SUBSCRIPTIONS and Address Changes, pleaseTax-Cut Deal telephone our local customer service hotline, Hong5. India Deals Face a Reckoning Kong/Taiwan: 852-2831 2555; Beijing: 86-10 6581 4090; Shanghai: 86-21 5836 8228; Indonesia: 62-21 527 7592;Most emailed in Asia Japan: 81-3 6269-2760; Korea: 82-2 756 1695; Malaysia: 60-3 2026 4061; Philippines: 63-2 848 5873; Singapore: 65-6415 4000; Thailand: 66-2 652 0871;1. The World Lies in China’s Orbit India: 91-11 6462 0215. Or email: service@wsj-asia.com2. Panel: Triple That Vitamin D ADVERTISING SALES worldwide through Dow Jones3. A Family Compound Find the latest news, International. Hong Kong: 852-2831 2504; Singapore:4. Chinese Viewers Send Out for culture, real-estate trends 65-6415 4300; Tokyo: 81-3 6269-2701; Frankfurt: 49 69 29725390; London: 44 207 842 9600; Paris: 33 1 40 17Thai Drama 17 01; New York: 1-212 659 2176. Or email:5. China’s Web Takes On a Luxury and more on Hong Kong wsja.publisher@dowjones.comLook at: Trademarks appearing herein are used under license from Dow Jones & Company. USPS 337-350ISSN 0377-9920
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 3 WORLD NEWSU.S. cable: China did Google hackBY LORETTA CHAO cause even though the individual’s ganda official Li Changchun and top mation Office with the oversight” of that the source disputed some of information wasn’t verifiable, com- security official Zhou Yongkang, Mr. Li and Mr. Zhou, the cable said, the content in the cable, saying Mr. BEIJING—Leaked U.S. diplomatic mercial retaliation by the govern- both members of the Politburo according to the report. Li did personally oversee a cam-cables are shedding new light on the ment on Google seemed “quite pos- Standing Committee, the Chinese Attempts to get comment from paign against Google’s operations inatmosphere of suspicion and tension sible” and was “cause for serious Communist Party’s nine-member the Chinese government and the in- China, but that he had no knowledgebetween the U.S. and China sur- concern.” governing group, based on informa- dividuals named were unsuccessful. of Mr. Li having anything to do withrounding a massive rupture between Google’s later decision to pub- Mr. Li is widely believed by ex- the hacking attacks against Google.Google Inc. and the Chinese govern- licly refuse cooperation with Chi- perts to be at the helm of China’s Meanwhile, the New York Timesment. nese censors did have commercial The cyber attacks on the heightened censorship regime over also said it contacted an individual The cables, gathered by the consequences. Though many smart- the past two years, which led to pu- cited in a cable who said China’sWikiLeaks website and published by phones running Google’s Android company ‘had been nitive actions against websites such State Council Information Office de-news organizations, include allega- operating system are currently be- coordinated out of the State as Google and its Chinese rival livered a report to senior leaderstions that sophisticated cyber at- ing sold in China, the world’s largest Baidu, and the shuttering of thou- this spring, saying that “through thetacks on Google, which the company mobile market by number of sub- Council Information Office,’ sands of websites, but the specula- Google incident and other increasedpublicly complained about early this scribers, some companies have dis- the cable said, according to tion hasn’t been confirmed. controls and surveillance, like real-year, were ordered by top Chinese tanced themselves from Google this The number of people with di- name registration, they reached aleaders. They document how China year by preinstalling on their hand- the report. rect knowledge of what is discussed conclusion: the Web is fundamen-put growing pressure on Google sets links to the search engines of in Politburo Standing Committee tally controllable.”over the years to censor its searches Google’s competitors, Baidu Inc. and meetings is very small, and they sel- Other cables listed examples ofwithin China. According to one ca- Microsoft Corp.’s Bing. tion from an unnamed Chinese dom, if ever, speak to foreign diplo- hacking attacks allegedly from Chinable, authorities may have stepped The New York Times reported source with elite family connections. mats and journalists. The New York in which information, includingup the intimidation last year by ask- that one of the cables traced cyber The attacks “had been coordi- Times said it contacted the source emails and passwords from a three state-owned telecommuni- attacks on Google to senior propa- nated out of the State Council Infor- cited in the cable about Mr. Li, and government agency, were stolen.cations companies to stop workingwith the U.S. search giant. This year, Google decided to stopcooperating with authorities andmove its search services out ofmainland China, putting at risk itsfuture in the world’s biggest Inter-net market, by number of users. Several news organizations, in-cluding the New York Times and theGuardian, were given access to themore than quarter-million cablesbefore WikiLeaks began makingthem public late last month. The ca-bles on Google, some of which werepublished on those newspapers’websites, were based on researchand conversations with various indi-viduals, many by officials from theU.S. Embassy in Beijing. Names ofsources were redacted on some ca-bles, making it hard to assess theircredibility. Details couldn’t be inde-pendently verified. One cable noted that Google’sannouncement early this year that itwould stop cooperating with Chi-nese censorship regulations “pre-sented a major dilemma” for theChinese government because itmade Google more interesting andattractive to Chinese Internet users,like “forbidden fruit.” It also saidaccusations made at the time byChinese authorities that Google wasworking with the U.S. governmentto undermine the Chinese govern-ment were part of a strategy to “ap-peal to Chinese nationalism.” Another cable recorded conver-sations with Dan Piccuta, formerlydeputy chief of mission at the U.S.Embassy in Beijing, and unnamedindividuals about Google facing in-creasing censorship pressure be-cause a Politburo member allegedlyentered his name into its search en-gine and discovered that the com-pany’s global site is uncensored andthat Chinese-language searches in-cluded results critical of him. The cable said three ministrieswere asked to demand that Googlecease its “illegal activities,” which itsaid included providing links fromits Chinese website, which was fil-tered at the time, to its unfilteredglobal website. Google declined be-cause it was “against company prin-ciples.” Google didn’t immediately re-spond to a request for comment. Efforts to compromise with au-thorities failed, and an individualwhose name was omitted from thepublished cable said that China hadasked telecom companies to stopworking with Google. This would bea “hard blow” because Google wasbetting heavily on mobile Internetin China, the individual said. The cable recommended a “high-level” U.S.-government response be-
    • 4 * * THE WALL STREET JOURNAL. Monday, December 6, 2010 WORLD NEWS: ASIAMumbai-attack organizers identifiedBY AMOL SHARMA Mr. Headley’s interrogation in early Pakistan has been unable to identify related charges. catch all the Sajid Mirs you’ve got in June and other evidence was sub- these people, whom Mr. Headley He acknowledged attending Pakistan, match the voice transcript, NEW DELHI—David Headley, the mitted to Pakistan this summer to likely knew by pseudonyms. training camps in Pakistan operated and you’ve got your guy.”Pakistani-American who pleaded further the country’s prosecution of Pakistan’s government has by Lashkar-e-Taiba and conducting Under a plea deal, the U.S.guilty in U.S. federal court to aiding those responsible for the deadly strongly denied having any role in surveillance of several Mumbai tar- agreed not to extradite Mr. Headley,the 2008 Mumbai terrorist attacks, rampage in Mumbai, in which 10 the Mumbai attacks. The govern- gets ahead of the attacks as well as a decision that has made it moreidentified voices of some key con- gunmen killed more than 160 people ment has charged seven people in helping co-conspirators find landing difficult for India and Pakistan tospirators in the gruesome shooting at some of the city’s top tourist its Mumbai investigation, including sites in Mumbai for attackers arriv- use his testimony to help prosecutespree, a top Indian official said. spots and hotels. But Pakistan is members of Lashkar-e-Taiba, but ing by sea. those whom he identified as respon- Indian investigators played intel- making “no progress” despite In- their trials haven’t started. Indian Mr. Pillai said Mr. Headley’s in- sible for supervising the attacks. Mr.ligence phone intercepts for Mr. dia’s leads, Mr. Pillai said. officials have been frustrated at terrogation revealed a “sophisti- Pillai said the U.S. made that deci-Headley during an interrogation this “I don’t think they’re going to do what they see as stalling tactics, a cated command-and-control” net- sion “unilaterally” and “withoutyear, said the official, Home Secre- anything about it,” Mr. Pillai said, work that orchestrated the attacks. consulting either India or Pakistan.”tary G.K. Pillai. The U.S. made Mr. adding that he believes that Paki- Each of the handlers he identified As a result, he said, Mr. Headley’sHeadley available to Indian officials stan’s moves so far to advance the Mr. Headley’s interrogation on the tapes was responsible for a statements can’t be used in Indianfor questioning in Chicago in early case are a “facade” and that it isn’t different target—one for the Taj or Pakistani courts, though his iden-June. India had pressed for access pursuing the people in the “control revealed a ‘sophisticated Mahal Palace hotel, one for the Cha- tification of Mumbai planners onto him on U.S. soil because his U.S. room” who orchestrated the attacks. command-and-control’ bad Jewish community center and voice recordings has furthered In-plea deal barred his extradition. He said Pakistan is wary of cracking so on. dia’s investigations into the attacks. Mr. Pillai said in an interview down on top militants, for fear they network, Mr. Pillai said. Among the names India turned Mr. Pillai said it was a “sovereignthat Mr. Headley was able to iden- will “sing” and implicate Pakistani over to Pakistan was Sajid Mir, who decision of the U.S.” to make a dealtify three out of four Pakistan-based government officials in the attacks. India believes was one of the mas- with Mr. Headley.“handlers” for the attacks in those “They just can’t do it,” he said. major reason attempted peace talks terminds of the Mumbai attack as a A spokeswoman for the U.S. em-recordings. Mr. Headley told investi- Abdul Basit, a spokesman for between the nuclear-armed rivals top official in Lashkar-e-Taiba. The bassy in New Delhi declined to com-gators he personally had two han- Pakistan’s foreign ministry, said In- haven’t got off the ground this year. intelligence intercepts India has ment. In June, U.S. Ambassador todlers, one from the militant group dia this summer gave Pakistan the Mr. Headley, the 49-year-old son turned over to Pakistan are strong India Timothy Roemer said IndiaLashkar-e-Taiba, which India be- names of six Pakistani nationals, in- of a Pakistani diplomat and an evidence of Mr. Mir’s role, Mr. Pillai and the U.S. enjoyed “superb coop-lieves carried out the attacks, and cluding two people believed to be American woman, was arrested by said. He said he has told Pakistani eration” in the questioning of from Pakistan’s spy agency, the serving or former military officers, U.S authorities in October and officials, “I’ve given you the photo- Headley in Chicago.Inter-Services Intelligence. who Mr. Headley said were involved pleaded guilty in March in a Chicago graph, I’ve given you the voice tran- —Tom Wright contributed Mr. Pillai said information from in the Mumbai attacks. But he said federal court to several terrorism- script, the guy is in Pakistan. You go to this article.India deals face environmental reckoningBY GEETA ANAND forested area of the country,” he said in an interview. “It is true that NEW DELHI—Jairam Ramesh, In- where you stand depends on wheredia’s environment minister, will you sit.”make a decision in the next week Political observers say Mr.that could define the country’s fu- Ramesh can afford to stand againstture: whether to approve a $12 bil- some of India’s top politicians andlion steel plant, the largest potential industrial houses because he has theforeign direct investment on the support of India’s two most power-subcontinent. ful people—Sonia Gandhi, president The plant, proposed by South of the ruling Congress party, andKorea’s Posco, has been in the her son, Rahul Gandhi, a party offi-works for years. It has been cleared cial who is viewed as India’s futureby the environment ministry, which prime minister. Mr. Ramesh ac-Mr. Ramesh runs, and endorsed by knowledges this backing. Others be- Sanjit Das/Panos for Wall Street Journalthe prime minister’s office. lieve he derives strength from an But Mr. Ramesh shocked the po- image of honesty and transparencylitical and industrial establishment in a political system better knownhere in August by publicly putting for corruption and cronyism.the project on hold while he investi- Says Mr. Sahgal, the environmen-gated reports that the rights of peo- talist: “Jairam is neither a hero norple living in the forest had been vio- a demon, he’s just an ordinary guy.lated. Two committees he appointed Indian politicians have fallen to suchto look into the matter have con- a low that an ordinary guy looks likecluded that Posco broke environ- a hero.”mental laws and failed to obtain the Indian Environment Minister Jairam Ramesh has held up billions of dollars in deals he says flout Indian laws. Mr. Ramesh sees Posco as hisgo-ahead for development from for- most contentious decision.est dwellers, as required by law. India’s environmental regulators when this enforcement is layered on environment and forestry in 2009, From the start, some local resi- Now, Mr. Ramesh must decide have acquiesced to industry desires. top of India’s legendary bureaucracy Mr. Ramesh promised in his first dents opposed selling their land towhether this merits killing a mas- He views it as his job to restore the and labyrinthine land-acquisition speech to expedite decision-making Posco, and at one point barricadedsive infrastructure project. balance and to ensure that India’s process, infrastructure development on major development projects and off their village. The company “If the minister of environment sensitive environment, and those has come to a virtual standstill. remove corruption from the process. seemed to be moving toward resolv-and forests is not going to imple- who live off the land, don’t pay too Shashi Ruia, managing director “I was really scared when I heard ing its land-acquisition issues whenment the laws that are the acts of big a price for industrial expansion. of Essar Group, a conglomerate that that,” said Bittu Sahgal, editor of Mr. Ramesh stepped into the fray inParliament, what is he going to do?” This year, Mr. Ramesh has chal- owns one of the coal-mining proj- Sanctuary Magazine and one of In- August. He told the company to holdMr. Ramesh said in a November in- lenged plans to replace Mumbai’s ects rejected by Mr. Ramesh, re- dia’s most outspoken environmen- off on further land acquisition untilterview in his office, one of several airport, blocked the damming of a cently drew attention in a speech to talists. he reviewed whether forest dwell-conversations with The Wall Street northern river to supply water to the fact that India is far behind But Mr. Ramesh says he began ers’ rights and environmental lawsJournal. Mr. Ramesh, 56 years old, New Delhi and turned down eight China in infrastructure develop- reviewing the files of major projects had been violated.has had a large hand in determining coal-mining projects backed by the ment. China produced 567 million and found many were blatantly A Posco spokesman declined tothe nation’s industrial development, prime minister’s office. tons of steel last year, to India’s 56 flouting environmental and forest comment because the project is be-as almost all big projects require his He withdrew approval for million tons, according to the World protection laws. “The approach was fore the ministry. It said in a recentapproval. His critics say that in 17 Vedanta Resources PLC’s massive Steel Association. To close the gap, that laws are like gods and god- press release that it had been tryingmonths in office, he has veered too project to mine a key ingredient in Mr. Ruia said, “Government needs to desses—do ritual obeisance to them for five years to comply with allfar in an anti-business direction, aluminum, saying the company had get out of our way.” and don’t take them seriously,” he statutory requirements.crushing many of India’s largest in- failed to obtain the consent of forest Mr. Ramesh doesn’t have an en- said. “The laws were seen as nui- Mr. Ramesh said social activistsfrastructure projects, which even his dwellers in the area, violating the vironmental background. He gradu- sances to be navigated around.” and political leaders sent him evi-own political leadership considers forest protection law. The London- ated from the Mumbai branch of the In a U-turn from his time at the dence that Posco hadn’t obtainedvital to keep India growing. based conglomerate had already in- prestigious Indian Institute of Tech- power ministry, he sent the eight the forest dwellers’ consent to the India needs such projects to vested $5.4 billion in building a fac- nology before getting a master’s de- coal-mining project files to the project.maintain economic growth, pro- tory nearby to be supplied by the gree in public management at Pitts- prime minister’s office with a note That would put Posco in clear vi-jected at 8.5% this year. Otherwise, now unapproved mine. Vedanta has burgh’s Carnegie Mellon University. explaining that he couldn’t in good olation of the law, Mr. Ramesh said,the nation of 1.2 billion will struggle denied any improprieties in connec- After a year at the Massachusetts conscience approve them because of and would make his decision move hundreds of millions of tion with the mining project. Institute of Technology in a doctoral the environmental cost, he said. But he said he must also weigh thepeople from subsistence farming to Many of his critics agree that Mr. program, he returned to India in In his earlier job, his aim was to importance of the project to India’sproductive industrial jobs, as China Ramesh is technically correct in 1980 to join a government advisory develop one of the country’s richest future. “I must also be conscious ofhas done in the past two decades. finding project after project in vio- board on energy. coal deposits, he said. “I did not re- the growth imperative and foreign Yet Mr. Ramesh says for too long lation Indian laws. But they say that Elevated to the job of minister of alize they were in the thickest, most policy objectives,” he said.
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 5 WORLD NEWS: ASIA Price check Change from a year earlier in consumer prices in two countries that are taking on inflation: North Korea increases 10% 8 6 CHINA 10 % 8 6 BRAZIL criticism of the South BY EVAN RAMSTAD on the island. Its statement used rum to discuss denuclearization 4 4 vague terms to claim that waters with North Korea. The U.S. proposed SEOUL—North Korea’s state me- around the island belong to North the forum in 2003, but has allowed 2 dia maintained its barrage of criti- Korea, and it isn’t clear whether it China to sponsor and convene the 2 cism at South Korea and the U.S. on meetings. Sunday, saying Seoul was “far from China has so far taken a neutral 0 0 drawing a lesson from the deserved South Korea, the U.S. and stance on the North Korean attack, punishment” of the North’s attack prompting criticism both in and out –2 –2 Japan will meet to discuss on the South’s Yeonpyeong Island of the country. High-level Chinese 2007 08 09 10 2007 08 09 10 nearly two weeks ago. the attack and plot a diplomats traveled to Pyongyang Sources: China’s National Bureau of Statistics; Brazil’s Central Bank The latest statement, issued by last week under pressure from other Korea Central News Agency, said diplomatic course. countries to rein in North Korea. South Korea is “getting more frantic China, despite being North Ko-Beijing makes shift in military provocations and war rea’s chief political and economic moves.” The statement also showed refers to water north of the island benefactor, has asserted limits to its that Pyongyang closely watched the as South Korea acknowledges as the ability to influence dictator Kim confirmation hearing of South Ko- maritime border, or to the south. Jong Il and his regime. rea’s new defense minister, Kim Extreme rhetoric is common into combat inflation Kwan-jin, on Friday. Mr. Kim said South Korea would respond to any fresh attacks by North Korea with air power, some- statements from Pyongyang, but Sunday’s announcement claimed that South Korea plans to use the contested maritime border alsoBY AARON BACK to march higher next year as the thing that it didn’t do during the area to “strike the strategic targets government gets tougher on infla- Nov. 23 assault on Yeonpyeong, an deep inside the territory” of North BEIJING—China will shift to a tion. The announcement “basically island in the Yellow Sea just a few Korea, including Pyongyang.“prudent” monetary policy next year, ratifies the emerging market under- miles from the North Korean coast- At no time has a South Koreanthe ruling Communist Party decided standing that’s been trickling out line. Four South Koreans—two civil- official suggested such a move.on Friday, a move that formalizes the over the last few weeks,” said ians and two marines—died in the On Monday, U.S. Secretary ofgovernment’s change in priorities Arthur Kroeber, managing director attack. State Hillary Clinton will host heraway from driving all-out economic of economic research firm GaveKal South Korea has added new South Korean and Japanese counter-growth toward combating inflation. Dragonomics. weaponry, including multiple rocket parts in Washington to discuss the Beijing’s move comes as another Expectations of tighter policy launchers, to the island since the at- North Korean attack and plot a dip-booming economy, Brazil, took aim have been widespread since official tack. And officials have said they lomatic course.against inflation pressures, with its figures showed the consumer-price will continue to test artillery there, One issue they face is whethercentral bank rolling out measures to index in October rising 4.4% from a firing into waters that South Korea the three countries will continue tocurb rising prices and fast-moving year earlier, a two-year high. has long controlled. participate in the so-called six-partycapital inflows. Brazil’s Central Bank Analysts generally expect China North Korea has said that such process that also involves China andpresident, Henrique Meirelles, said to impose a lower target for total tests on Nov. 23 prompted it to fire Russia and has been used as a fo-directives announced Friday, which lending by banks next year, andaim to withdraw about 61 billion have said there could be additionalBrazilian reais ($35.88 billion) from interest-rate or reserve-ratio in-the financial system, will have an ef- creases by the end of this year. Thefect on inflation and economic ac- central government has also showntivity, and would also be felt in in- great concern over the social impactterest rates. of higher prices, rolling out mea- In China, the change in the offi- sures intended to help lower thecial language used to describe the cost of necessities such as food.government’s economic policy, from China’s economy, on track to sur-the current “moderately loose,” so- pass Japan this year as the world’slidifies a transition that has taken second-largest, has become an in-place over the past several months. creasingly significant driver of glo- d c m 13 h - 14 h 2010, ItC M h ,M m iAt a time when the U.S. and other bal growth. Both Chinese and globalmajor economies are struggling to investors have been rattled at times www.chim i m .c mpropel growth, China has increas- in recent months by fears thatingly focused on containing inflation China’s efforts to crack down on in-and asset-price bubbles, and phased flation could also punish growth.out some of the supportive policies But they seemed to take the lat-that prevailed during the global fi- est announcement in stride. Thenancial crisis and its aftermath. Shanghai Composite Index was al- Li Daokui, an adviser to the Peo- most unchanged Friday, closingple’s Bank of China, was quoted Sat- down 0.04% at 2842.43, and tradersurday by the state-run China Daily said the policy shift was alreadynewspaper as saying the shift to a priced into stocks.“prudent” monetary policy from a Like China, Brazil is taking steps“moderately loose” one will be fol- to prevent its economy—the largestlowed by moderate and gradual in- in Latin America—from overheating.terest-rate increases. Authorities Friday’s announcement comes as“won’t slam on the brakes” over- Brazil’s central bank is preparing tonight, and will consider the effect of meet this week to decide whether toany rate changes on Chinese stocks change the country’s reference Selic InvestIng beyond your bordersand global financial markets, the pa- interest rate, currently set at 10.75% Chi -I i - Mi eper quoted him as saying. annually. “As we have seen during The Friday statement doesn’t the past year, central banks have of- speCIal Corpor ate paCk ages avaIlable for WsJa readershave direct bearing on Beijing’s ex- ten been using reserve requirementschange-rate strategy, although a as the first step down the tightening p i c :stronger yuan can help address in- path, and such hikes have almostflation by reducing the effective universally been followed by policycost of imports. The yuan has risen rate hikes as well,” said Win Thin,about 2.5% against the dollar since global head of emerging-marketsJune and many analysts believe it strategy at Brown Brothers Harri-will continue to rise gradually. man in New York. China’s central bank raised inter- The stimulus plan Chinaest rates in October for the first launched in November 2008 totime in nearly three years. Central counter the global financial crisisbank officials have repeatedly said was planned to last until the end of f h i m i ,c c : +971 4 367 1383they want to “normalize” the easy- 2010. Friday’s shift to a “prudent” q i i @ .c mcredit policies that have led to a monetary policy returns the officiallending boom of historic propor- terminology to what was used for c i i i itions. Even before Friday’s an- many years before the crisis.nouncement by the Politburo, the —Gerald Jeffrisparty’s decision-making body, many and William Mallardeconomists expected interest rates contributed to this article.
    • 6 THE WALL STREET JOURNAL. Monday, December 6, 2010 WORLD NEWSEU dealt setback on China at WTOAntidumping tariffs on Chinese screw imports are targeted in decision; could set precedent for emerging marketsBY JOHN W. MILLER products cheaper. Chinese Ministry of Commerce com- LLC, a Washington-based argument that manufacturing in China joined the WTO in 2001. plained of systematic “unfair treat- consultancy. Last week, China ap- China is legitimately cheaper, even BRUSSELS—The World Trade Or- Its exports to the rich world imme- ments” over the past decade. pealed the methodology used two without help from the state.ganization condemned European diately soared, leading to tensions Beijing started putting up a fight years ago by the U.S. to impose tar- In a statement, China welcomedUnion antidumping tariffs on im- over currency values, public con- around 2008, when it emerged as a iffs on Chinese steel pipes, tires and the ruling. The WTO, it said, hadports of Chinese screws, handing tracts, access to the Chinese market key player for the first time, in the cloth sacks. made it “clear that the EU’s anti-Beijing its biggest legal victory yet by Western companies and charges failed discussions on the Doha Import duties helped cut EU im- dumping legislation and practice areat the Geneva-based body. EU offi- of “dumping,” or exporting to a for- Round of trade talks. About the ports of Chinese screws and fasten- discriminatory and inconsistent withcials described the decision as a sig- eign country below cost. same time, it inaugurated a brand- ers to $555.7 million in 2009 from WTO rules.”nificant setback. The EU and the U.S. have made new mission, a football field away $1.39 billion in 2007. In July, China “It is important to note that this Legal experts said the victory is extensive use of WTO rules that al- from WTO headquarters. China also appealed, and the WTO accepted a is only an intermediary step becausea sign of the effectiveness of China’s low countries to impose tariffs on started paying top dollar for expert few months later. China’s main claim the EU or China can decide to ap-strategy of fighting foreign import dumped goods, frequently targeting trade lawyers. “We started lining up was that the EU unfairly used costs peal it. It is therefore too early totariffs by hiring top-notch trade countries where the state plays a for their business,” says a Geneva- in India and the EU itself as compar- speculate on what kind of impactlawyers and lobbying heavily at large role in the economy, such as based lawyer for an international isons when determining what the the ruling would have,” said JohnWTO headquarters in Geneva. China or India. Between 1999 and trade law firm. screws should have cost to make in Clancy, an EU spokesman. Privately, Friday’s 394-page ruling could 2009, China was the target of 445 Since then, China has systemati- China. Because China is classified as EU officials said the ruling was aalso set a precedent, making it antidumping measures, or 24% of cally challenged EU and U.S. tariff a “non-market economy,” investiga- significant defeat.harder for the EU and the U.S. to im- those imposed by all WTO members increases against its exports. “They tors are allowed to use a formula to The EU now has 60 days to ap-pose antidumping tariffs on devel- combined. have a lot of complaints against determine what making the good peal. If it loses, it will have to reviseoping economies like China and That hasn’t sat well with the Chi- them, and they’ve become adept at should have cost without public aid. these tariffs, and make changes toVietnam, which argue that factors nese government. In a statement re- challenging other countries,” Simon On Friday, the WTO accepted the the way it investigates allegations ofother than state aid make their leased Friday following the ruling, Lester, founder of WorldTrade Chinese claim, accepting the Chinese dumping.Bird flu in Japan is confined to chickensBY MIHO INADA AND SHIRLEY S. WANG WHO spokeswoman, about the re- cent cases. Outbreaks can occur any The Japanese government con- time of the year, she said.firmed the country’s first outbreak Japan was hit with the H5N1of a high-risk bird flu in three years, strain in 2004, the first avian flu inthough it stressed that there was no 79 years, and then again in 2007. Of-evidence the disease had spread be- ficials slaughtered 410,000 chickensyond chickens. Friday’s report came and 170,000 chickens after each in-two weeks after Hong Kong re- cident in western Japan. (Less-viru-ported the first human case there lent avian flu variations were de-since 2003. tected in Japan in 2005 and 2009.) The announcement from Japan’s In a sign officials think they haveMinistry of Agriculture, Forestry, contained the spread this time, thisand Fisheries came after a farm in week’s ban on egg shipments wasrural western Shimane prefecture lifted Friday as the flu tests on thefound five chickens dead in one birds in the nearby farms were neg-place in its poultry house on Nov. ative. Restrictions on transporting27, and a few more in the same spot poultry will remain until the safetyon Monday morning. After a quick of the area is confirmed by furthertest turned up positive for the in- testing on all of the birds in thedustry-threatening bird flu, 21,500 nearby farms for three weeks after Agence France-Presse/Getty Imageschickens on the farm were slaugh- a disinfection process is complete.tered and four farms nearby—within The agriculture ministry said ina 10-kilometer radius of the infected a statement that even if humansfarm—were ordered not to ship eggs consume infected meat and eggs,and poultry as a precaution. they wouldn’t be affected. While the bird-flu scare has re- How the Shimane birds were in-ceded, the strain has never fully dis- fected is under investigation, but itappeared since the big outbreak is possible an infected wild bird en-seven years ago. Globally, some 40 tered the poultry house throughhuman cases, including 20 deaths, Nine Asian countries have reported previous H5N1 outbreaks. Above, a Hong Kong bird market. some enlarged holes in the bird-pre-have been confirmed this year by vention net, said Ryuji Kawakami, athe WHO. In 2009, there were 73 number of human cases resulting in avian flu. infection was confirmed in Hong Shimane prefecture official.confirmed cases and 32 deaths. severe disease and death. Nine Asian countries, including Kong, its first in seven years. In Oc- “It’s really regrettable that this Friday’s test in Japan identified Outbreaks of H5N1 infection in Japan, have reported previous H5N1 tober, two human cases were re- happens here, given that we make athe virus taken from the dead chick- birds have been rare. Those that be- outbreaks. In Japan, the outbreaks ported in Indonesia. routine checkup on the sanitation ofens as the H5N1 strain of avian in- gan in Southeast Asia in 2003 were were controlled and the country was It is “not unusual to see sporadic chicken houses diligently everyfluenza. Multiple strains can be the most widespread and severe, ac- considered free of disease, accord- human cases” in regions where month. This is one of the diseasestransmitted to humans, but the cording to the World Health Organi- ing to the global health body. there are occasional outbreaks in that chicken farmers are most afraidH5N1 strain has caused the greatest zation, which monitors cases of On Nov. 17, a case of H5N1 human poultry, said Aphaluck Bhatiasevi, a of,” Mr. Kawakami said.RBI asks banks to stimulate economy, investment MUMBAI—Indian banks need to The central bank has been push- pre-crisis growth rate of 9% in the The bank also said it will raise interest margins high. Once finan-raise their deposit rates and cut ing lenders to raise deposit rates for financial year that begins April 2011. its prime lending rate, used to price cial inclusion models become viable,lending rates to help the economy some time now. In its September Mr. Subbarao also said Indian most corporate loans, and the float- the transaction cost will come downexpand at a faster pace, Reserve monetary-policy review, it said that banks’ net interest margins remain ing reference rate, used to price and the banks will pass on the bene-Bank of India Governor Duvvuri “if bank credit is not to become a higher than in some emerging-mar- consumer loans, by 0.50 percentage fit to the customer,” said D.L. Rawal,Subbarao said. constraint to growth, real rates ket economies even after accounting points each. Both lending rates only chairman of Dena Bank. need to move in the direction of en- for subsidized loans for farmers and apply to loans approved before June The RBI will soon issue a discus- By Nupur Acharya, couraging bank deposits.” Already, other social obligations. 30, 2010. Those rates have been re- sion paper on foreign banks’ pres- Khushita Vasant the strains are evident in the bank- The net interest margin for the placed by the base rate, which is ence in India. and Subhadip Sircar ing system with deposit growth lag- Indian banking system was 2.5% in used as a benchmark for loans ap- Mr. Subbarao said that the dis- ging behind loan growth, accentuat- the fiscal year ended March 31, proved since the beginning of July. cussion paper will address issues “To achieve our collective aspira- ing a shortage of cash. down from 3% in the preceding year, Bankers didn’t agree that lower- such as whether foreign banks thattion of double-digit and inclusive The governor’s call comes at a according to central bank data. ing net interest margins was plausi- have established themselves in Indiagrowth, we need to raise the level of time when the Indian economy is On Saturday, ICICI Bank Ltd. ble in the immediate term. by setting up subsidiaries should benational savings and channel those growing quickly, clocking 8.9% in said it will raise its fixed deposit “As banks now have to spend on given full national treatment, andsavings into investment,” he said at the July-September quarter. The rates by between 0.25 and 0.50 per- financial inclusion, maybe for one or whether existing foreign banks willa banking seminar on Friday. government hopes to return to the centage points, starting Monday. two years they may have to keep net have to take that route.
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 7
    • 8 * * THE WALL STREET JOURNAL. Monday, December 6, 2010 WORLD NEWS: U.S.Senators say tax deal is attainableBY JENNIFER CORBETT DOOREN who earn less than $200,000 and payroll tax credit for new hires. couples earning less than $250,000 That package would cost the Top Senate lawmakers said Sun- with a vote of 53-36. A vote of 60 Treasury around $150 billion a they believed they were moving would have been needed to allow But without it, taxes would still risecloser to a deal that would keep the the bill to come to the Senate floor. for 95 percent of Americans, aBush-era tax cuts from expiring at Lawmakers then defeated a sepa- White House official said.the end of the month and extend un- rate attempt by a vote of 53-37 to House lawmakers approved leg-employment insurance benefits. raise the threshold for middle-class islation permanently extending the The comments were made Sun- tax cuts to $1 million and then ex- lower tax cuts for middle classday on talk shows, a day after the tend that tax level permanently. Americans on Thursday.Senate turned aside two attempts Republicans unanimously op- The tax cuts implemented inby Democrats to permanently ex- posed both votes along with some 2001 and 2003 by the Bush adminis-tend the tax cuts for the middle Democrats. tration are set to expire at the endclass. After the votes, Obama told of the year unless they are renewed They also came a day after Presi- Democratic congressional leadersdent Barack Obama said he’d be that he would be open to a tempo-temporary extension of tax cuts for rary extension of the Bush tax cuts It may link an extension of Associated Pressthe affluent, but in exchange for a for upper-income levels but wouldyear-long extension of unemploy- ask for GOP concessions such as an the Bush-era tax cuts, whichment insurance, among other politi- extension of unemployment insur- are set to expire at the end ofcal bargaining chips. ance benefits. The tax cuts enacted under Pres- After the vote: Sens. Mitch McConnell (R., Ky), left. and John Barrasso (R., Wy.). President Barack Obama called the year if Congress does notident George W. Bush will expire at the votes “very disappointing” and act, to an extension ofthe end of the year unless Congress in the recession,” he said. “We are Republican Whip, said, “I think that said the issue of the tax -ut renewalapproves an extension and President discussing how long we should most folks believe the recipe would needed to be resolved shortly. unemployment benefitsBarack Obama agrees to it. maintain current tax rates.” include at least an extension of un- After the Senate votes, President Republicans want to maintain He also said Republicans support employment benefits for those who Obama told Democratic congressio-the cuts for all income levels while extending unemployment insurance are unemployed and an extension of nal leaders he would be open to a by Congress.Obama and most Democrats want saying the controversy is “not about all of the tax rates for all Americans temporary extension of the Bush-era Before the November midtermonly to keep the reductions for indi- whether to do it but about whether for some period of time.” tax cuts for the affluent, but he elections, Democrats pushed just forviduals earning $200,000 or less or to pay for it.” Also speaking on the same pro- would demand concessions from the the renewal of lower tax rates forcouples earning $250,000 or less. Unemployment insurance typi- gram, Sen. Dick Durbin,(D., Ill.,) the GOP: a year-long extension of unem- people earning less than Speaking on NBC’s “Meet the cally provides benefits to unem- No. 2 Democrat in the Senate, said ployment insurance and tax cuts for $200,000—what they termed mid-Press” Senate Minority Leader ployed Americans for 26 weeks but lawmakers “were moving in that di- middle-income and working poor dle-class Americans.Mitch McConnell, (R., Ky.), said he the federal government can extend rection” when asked if tax cuts Americans that were in the stimulus After the drubbing they received,was “optimistic” that Congress and benefits and typically does so dur- would be extended for upper-income law but also expire at the end of Obama and congressional Demo-the White House would soon agree ing economic downturns. Congress people. this year. Those include the Making cratic leaders made it clear theyto a tax deal that would include a has already passed several such ex- On Saturday the Senate failed to Work Pay tax cut of $400 for mid- would be open to an agreement thatmeasure to extend unemployment tensions during the current reces- get enough votes to bring tot he dle-income individuals and $800 for saw all the tax cuts renewed at leastinsurance benefits. sion. Senate a House bill passed on couples, a tuition tax credit, an ex- temporarily. “I think it’s pretty clear that Speaking on CBS’s “Face the Na- Thursday that would have extended panded earned income and child —Jonathan Weismancontributedtaxes are not going up on anybody tion,” Sen. Jon Kyl, (R., Ariz.,) the the lower tax rates for individuals credit for the working poor, and a to this article. It’s a Gyrating numbers BIG can be misleading BY MARK WHITEHOUSE At that rate, job growth can’t do WO much to bring down the unemploy- Judging from the closely ment rate. Even if the job market watched payroll numbers, the job improves, more discouraged job market looks like it’s on a roller- seekers will likely try to re-enter the coaster ride. But it’s actually telling labor force, adding to those who are r al RL a consistent story: The economy is counted as unemployed. afte growing at a pace too slow to make a dent in the unemployment rate. That’s why Federal Reserve Chairman Ben Bernanke has warned D, The Labor Department’s initial that the unemployment rate could estimate of how many jobs nonfarm rise even as the economy creates l. employers added to their payrolls in November was a meager 39,000, a seemingly sharp contrast to Octo- jobs—which is what happened in November, when it climbed to 9.8% from 9.6%. With the ber’s large gain of 172,000 jobs. November’s discouraging num- Statistically, though, those num- bers on retail employment offer an- right multinational bers aren’t as different as they look. other reason to be wary of focusing insurance, you can do That’s because they reflect merely on a single month’s results. They the change in a much larger num- suggest the economy shed 28,000 business anywhere. ber: the roughly 130 million people retail jobs last month, but that’s on nonfarm payrolls in the U.S. That largely a function of the Labor De- Whether your business is exposed to number is an estimate with a mar- partment’s seasonal adjustments, risk in two countries or 102, the Chartis gin of error. According to the Labor which shift the numbers downward Department, we can’t be reasonably to account for the unusually large companies can execute and service your certain that it has changed unless it hiring that typically happens ahead program—from underwriting to loss control moves by more than 100,800 jobs. of the holiday shopping season. “People pay way too much atten- Without the seasonal adjustment, to claims payment—no matter where you tion to the initial headline number, retailers added about 300,000 jobs. do business. See why businesses around the because it’s so politically sensitive,” But the way the government col- said Joseph Carson, director of glo- lects data means the seasonal-ad- world have turned to Chartis for over 80 years. bal economic research at Alliance- justment effect might reverse itself Visit Bernstein in New York. “A change of in the December figures. even 100,000 is really statistical The Labor Department does its noise.” count of payrolls in the week that To separate the signal from the includes the twelfth day of the noise, economists tend to average month. In November, that week the job-creation numbers for the came early, so the count might have past few months. Since September, missed the hiring that occurred the monthly increase in nonfarm ahead of Thanksgiving. As a result, All products are written by insurance company subsidiaries or affiliates of Chartis Inc. payrolls has averaged about 62,000 some of November’s hiring could be Coverage may not be available in all jurisdictions and is subject to actual policy language. jobs. Private firms have added an counted in December, when the sea- For additional information, please visit our website at average of about 107,000 jobs a sonal adjustment won’t be cali- month. brated to cancel it out.
    • Honey, how’s your heart? 10 LETTING KIDS TEACH THEMSELVES 11MONDAY, DECEMBER 6, 2010 LIFE & STYLE asia.WSJ.comBringing New Orleans course back to lifeNamed for a pioneering black golfer, Joe B.’s links are rebounding from Hurricane Katrina floods By this time Mr. Bartholomew had be- [ On Golf ] come quite wealthy, having diversified into construction, real estate, insurance andBY JOHN PAUL NEWPORT other businesses. He built a second nine holes at New Orleans Pontchartrain Park at his own expense and This city has never been later donated the course to the city, with known as a golf hotbed, the stipulation that it always be used for even before Hurricane Ka- public golf. He died in 1971; in 1979, the trina. Its culture and history course was renamed for him. were always what mattered Several of the old-timers remember Mr. most: the music, the French Bartholomew well. Gerald Dupre, 81, hasQuarter, the Mississippi River. But there are lived near the course since it opened andenclaves where golf matters a lot, and one once shot a 74 there. He still treasures anof them revolves around the Joe Bartho- Acushnet putter that Mr. Bartholomew soldlomew Golf Course in the northeast part of him in the 1960s for $13. “He was an all-town, ruined by 10 feet of flood waters five around gentleman. He took a lot of pride inyears ago. everything he did. He never looked for ex- Sometime in the next few weeks—and it cuses,” Mr. Dupre said.can’t be soon enough for the locals who Mr. Bartholomew’s legacy extends to thegather every afternoon in an open field ad- many African-American players who had no-jacent to Joe B. to hit golf balls and shoot where to play until the course was built.the breeze—bureaucrats from the city of (Not until the 1960s were African-Ameri-New Orleans will make a final inspection cans gradually allowed to play on othertour of the course’s $9.9 million renovation public New Orleans courses.)and sign documents that, in effect, accept Several long-established men’s clubs, likedelivery from the contractor. No one knows the Autocrat Social & Pleasure Club datingexactly how long it will take after that for from 1914, spun off groups with standingthe course actually to reopen. tee times at Joe Bartholomew. Many of the “It looks done as far as we’re concerned. early players were caddies from the whiteThey could have the greens rolling at 10 [on country clubs. Several of them went on tothe Stimpmeter] inside a week,” said Glynn caddy on the PGA Tour, including GaryDexter, one of the regulars who comes to the Player’s bagman from 1972 to 1990, Alfredfield most days after work. Before Katrina the “Big Rabbit” Dyer.same crew gathered under a shed near the Others, like regular John E. Brown, wentclubhouse—the lucky ones after a round of on to play college golf (Southern University,golf. They usually played dominoes. Now they his alma mater, is next door), and a fewpark their cars under live oaks, bring out made a run at the PGA Tour. Arthur Gilbert,lawn chairs and chat in-between shagging known as Ducky, followed the Tour overtheir own balls. several years, trying to Monday qualifying, “Weather permitting, we’d like to have and in 1973 came within a hair’s breadth ofthe course open by spring,” New Orleans earning his Tour card at Qualifying School.Deputy Mayor Cedric S. Grant told me this He was among those who took on, and fre-week. “Around here we use Mardi Gras, in quently beat, white college players wholate February or early March, as an indica- came to Joe B. looking for money games.tor of spring.” One of those challengers was Kelly Gib- Stacy Kranitz for The Wall Street Journal (2) But that may be optimistic. The city could son, New Orleans’s best-known PGA Tourdecide to run the course itself, as it did be- pro. Mr. Gibson, 46, effectively ended hisfore Katrina, but it also intends to issue in PGA Tour career after Katrina to help hisJanuary a request for proposals from outside native city rebuild, and Joe Bartholomew isentities to manage the course. Those propos- his most passionate project.als will take time to process. And it’s not as if “Beyond passion,” he said last month,the city government under recently installed when he dropped by to visit with the regu-Mayor Mitch Landrieu is without distrac- lars in the field near Joe B. He recruitedtions, with $700 million in other high-prior- and worked with the course architect, Gar-ity projects under way, many of them Ka- rett Gill, who led the renovation. They cre-trina-related. ated nine new lakes, redid all the greens One group that already has expressed in- Top, Autocrat club members Arthur ‘Ducky’ Gilbert, Joseph Hall and Gerald Dupre in Pontchartrain and added significant contour and elevationterest in managing Joe Bartholomew, at no Park. Above, left to right, Mr. Gilbert, Glynn Dexter, Mr. Hall, Smith Crocken Jr., Dwayne Ray Cormier, change to land that had been pancake-flat.cost to the city, is the New Orleans First Lance Antonio, Mr. Dupre, Robert ‘Hat’ Charles and Manuel McCrainey Jr. “In the long term, this course and someTee chapter, with an important assist from other golf projects in the works could helpthe PGA Tour. The Tour’s golf-course-prop- “The thing I’m trying to sell the city on meticulous greens-keeper that members of New Orleans become a golf destination,”erties unit recently signed a memorandum is that it’s not just about the First Tee, it’s the Metairie Country Club sent him north to Mr. Gibson said. A major nonprofit initia-of understanding with First Tee to provide about the community here,” said Dwayne apprentice in golf-course design under Seth tive to build a new championship course atits expertise and consulting services free, Ray Cormier, the executive director of the Raynor, the famed architect of such courses City Park, also inundated after Katrina, is atshould First Tee be selected to operate the chapter. “It’s about leveraging the legacy of as Fishers Island and Mid-Ocean in Bermuda an advanced stage. That project would usecourse. (Last month the PGA Tour formal- Joe Bartholomew himself. Joe Bartholomew and the routing at Cypress Point. profits to support the surrounding low-in-ized a slightly different arrangement with was the Louis Armstrong of golf. He was When he returned to New Orleans he de- come neighborhood, based on the success-San Francisco to operate its Harding Park that significant to this city.” signed, or helped design, the course at ful model in Atlanta of East Lake Golf Club,course, site of the 2009 Presidents Cup.) Mr. Bartholomew, born in 1881, grew up Metairie, course Nos. 1 and 2 at City Park site of the PGA Tour Championship. Before Hurricane Katrina, First Tee ran caddying at the city’s first course, at Audu- and others across the South—few of which For now, however, the locals at Joe Bar-its youth programs out of Joe Bartholomew, bon Park, and became so proficient as a he, as an African-American, was allowed to tholomew just want their course back. “It’sand funds are in place to rebuild its facili- player (he set the early course record, a six- play. In the early 1950s, he designed the a gem,” said Mr. Dexter, eyeing the flawlessties there starting next year. The work al- under-par 62) that he was backed by the first nine holes at Pontchartrain Park, a greens across the “No Trespassing” signs.ready done includes an expansive double- membership in arranged matches with the new middle-class residential area for Afri- “We’re champing at the bit.”ended practice range and short-game train- likes of Gene Sarazen and Walter Hagen in can-Americans, many of whom funded theiring area. the 1910s. He also became such a skilled and homes with the help of the GI Bill. Email John Paul at
    • 10 THE WALL STREET JOURNAL. Monday, December 6, 2010 LIFE STYLE Predicting heart health in children starts early BY RON WINSLOW Has your kid had a checkup for heart disease lately? The vast majority of heart at- tacks happen to people well past middle age, so a potential problem a half-century away may not be high on your list of child health-care worries. But it is well-established that heart disease begins to develop in childhood. Now, two new studies add to a burgeoning body of evi- dence that developing heart-healthy habits as a youngster or adolescent may have lasting benefits in adult- hood. One of the reports, based on a pooling of data from four major Getty Images studies that tracked people from early childhood into their 30s and Children who ate fruits and 40s, suggests that the presence of vegetables once a day had such risk factors as high blood pres- healthier arteries as young adults sure and abnormal cholesterol by than those who ate them less than about age 9 strongly predicts a twice a month. thickening of the walls in the ca- rotid or neck arteries in early adult- hood. Experts consider this condi- Risky business tion, called carotid intima media Four risk factors of heart disease thickness, a precursor to heart at- tacks and strokes. High total cholesterol The second study found that children who consumed fruits and High triglycerides or blood fats vegetables once a day had healthierJason Schneider arteries as young adults than those High body mass index who reported eating fruits and veg- etables less than twice a month. High systolic blood pressure Low consumption was associated (the higher number) with stiffening arteries, a warning Which clothes make the man? *Not statistically significant sign of future heart problems. Source: Circulation Both reports were led by re- searchers in Finland and are being published online Tuesday by the scenario is never to have those risk American Heart Association journal factors in the first place,” says Dr. Style sense, and the opposite, can strain relationships Circulation. Daniels. “When you accumulate the The studies have limitations, impact of a risk factor over time, proving their style. She’s had no We usually can trust our friends however. In both cases, the risks in that seems to be problematic. Inter- [ Bonds ] luck, though, with her fiancé, when they tell us they don’t like early years are linked to other risks rupting it early is a good concept.” Brian, who works at a hedge fund. what we’re wearing. If they don’t in adulthood—not to actual heart In one of the new reports, re- BY ELIZABETH BERNSTEIN He wears workout clothes to do it too often, it seems like attacks or other serious events. How searchers led by Markus Juonala, of work—sometimes with wingtip they’re doing us a favor, saving us reliable such surrogate markers are Turku University Hospital, Turku, Cathy Griffin and shoes. “I cannot take him to social from bad choices. But this isn’t so in predicting clinically significant Finland, gathered data from four her boyfriend re- functions or events,” she says. true of a mate. In our minds, a ro- problems is in some dispute. Data studies that tracked heart risk in to- cently got dressed Ms. Grundland has hidden his mantic partner is supposed to love on fruit and vegetable consumption tal of 4,380 people at three-year in- to go to Drago, a sweats, shrunk sweaters and cut us unconditionally and find us at- are based on how study participants tervals beginning as early as age 3 Santa Monica, Ca- holes in T-shirts. She has stocked tractive even if we’re wearing a described their monthly diet, not and followed them for more than lif., restaurant. She his closet with custom-made suits burlap sack. Criticism from a sex- from a rigorously controlled ran- two decades. In adulthood, they un- donned a leopard- and other new clothes—which he, ual partner can cut to the quick. domized study. derwent tests to detect thickening print chiffon dress with gold-and- for the most part, ignores. This has Therapists say that over time a Nevertheless, says Stephen in the carotid arteries. pearl earrings. His ensemble? led to arguments. “I love him, but partner’s odd clothing choices may Daniels, pediatrician-in-chief at Children with high levels of four Frayed khaki pants, a green shirt this makes things complicated start to represent aspects of their Children’s Hospital, Denver, the markers—total cholesterol; levels of missing a button, mismatched where they shouldn’t be compli- personality that annoy us, whether findings “are part of an emerging blood fats called triglycerides, a socks and a safari jacket. cated,” says Ms. Grundland. Her fi- it’s laziness, carelessness or vanity. and increasingly consistent picture measure of body size called body “Perhaps you’d like to wear Rob Wilson can tell you the ex- where lifestyle starting early in life mass index and systolic blood pres- something a bit more formal?” Ms. act item of clothing that helped is a very important factor for long- sure—were considered most at risk. Griffin, a 53-year-old executive re- In our minds, a romantic end his 22-year marriage: the peri- term cardiovascular health.” Dr. Researchers found the presence of cruiter, asked. Ms. Griffin’s partner winkle capri pants his now ex-wife Daniels was a co-author of one of the risk factors at ages 3 and 6 had accused her of treating him like a partner is supposed to find brought home for him a few years the studies. limited association with thickened child. She said he was dressed like us attractive even if we’re ago. “They didn’t even look like Interest in children’s heart arteries in adulthood. But beginning one. They bickered. And he went to clam diggers,” says the 53-year-old health is driven largely by the epi- at age 9, the risk factors were sig- dinner in what he’d originally wearing a burlap sack. motivational speaker from Atlanta. demic of obesity, which has more nificantly linked with evidence of planned to wear. “They looked like girl pants.” than tripled in prevalence among disease when the carotid artery test Long after we’ve learned to In the early 1980s, she intro- children over the past three de- was taken between ages 20 and 45. compromise on everything in a re- ancé declined to comment. duced him to the color pink and cades, according to the U.S. Centers The finding is consistent with lationship, from where to live to Relationships don’t start out taught him to wear suits with T- for Disease Control and Prevention. other research suggesting that risk what to eat tonight, personal style this way. At first, we’re often at- shirts instead of ties. “I loved her Nearly one in five children between factors begin to become meaningful can seem like the last choice we tracted to, or tolerant of, a poten- and wanted to please her,” Mr. Wil- 2 and 19 years old is considered between ages 8 and 10, researchers get to make all by ourselves. Yet tial partner’s style—a quirky tie, a son says. As time went on, though, obese; nearly one-third are over- said. It suggests that age range our spouse or significant beat-up jacket, even a confident he began to push back. “I felt like weight or obese. Obesity is associ- might be the time for a thorough other—who admittedly has to look obliviousness to fashion. But just it was controlling behavior,” Mr. ated with unhealthy cholesterol and heart-risk evaluation, says Hugh at us much more than we look at wait. See what happens when we Wilson says. blood pressure and also heightens a Allen, a pediatric cardiologist at the ourselves—often has a strong opin- find a mate and feel we can re- His ex-, Karen Johnson, 50, says person’s risk of heart attack. Ohio State University College of ion about what we wear. As any lax—when we trade in the tailored she doesn’t remember the capris Such statistics have many heart Medicine, Columbus. couples’ therapist can tell you, an shirts or stiletto heels for pants but admits she did sometimes experts worried that more than four Such a checkup might include innocent-sounding “Honey, are you with expandable waistbands. bring home “weird” clothing sam- decades of declining death rates due measurements of BMI, cholesterol really going to wear that?” often Ms. Griffin admits that when ples from work. “I was just trying to cardiovascular disease, the West- and blood pressure, as well as ques- has the subtext “It’s going to re- she first met her boyfriend, Peter to help him,” she says. “I never ern world’s leading killer, may un- tions about diet, exercise and expo- flect badly on me.” Byrne, 85, a novelist and wildlife tried to dictate what he should ravel if the problem goes unad- sure to second-hand cigarette Erika Chloe Grundland, 33, who conservationist, she fell for what wear.” dressed. Amid a flurry of new smoke, which has an impact on runs a New York image- and fash- she thought of then as his “Indiana So what does Mr. Wilson wear research in recent years related to heart health, he says. Unlike adults, ion-consulting firm, wears designer Jones look.” Now, she says, he these days? Bell bottoms and the adult consequences of childhood where specific cholesterol, blood clothes and coaches clients on im- thinks she’s a “control freak.” Birkenstocks—with socks. heart risk, experts are now rewrit- pressure and BMI targets are estab- ing guidelines on how to track and lished, what constitutes warning treat risk factors. signs in children depends on age “It’s pretty clear that the best and other factors.
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 11 LIFE STYLETurning kids from India’s slums into autodidactsInternet-based learning helps children teach themselves biotechnology, Newton’s laws of motion schools in a poor urban neighbor- One of my philosophical pas- [ Mind & Matter ] hood, teaching teachers to be facil- sions is bottom-up order. Human itators rather than pedagogues. beings have a hard time under-BY MATT RIDLEY On their own, children can get standing that some of the finest about 30% of the knowledge re- complexity in the world comes Everybody knows quired to pass exams. To go fur- about through spontaneous emer- that the Internet ther, Dr. Mitra supplements SOLE gence, not top-down diktat. This is will transform edu- with e-mediators, or the “granny true of ecosystems and economies, cation, but nobody cloud” as he calls it: amateur vol- of genomes and cultures, of em- yet knows how. unteers who use Skype to help kids bryos and encyclopedias. Most of the models learn online. The experiment is Education, though, feels like sound like dull at- now going global. Schools in Aus- one of those things that has to betempts to reproduce, at a distance, tralia, Colombia, England and India top-down: There has to be athe medieval habit of school- are trying SOLE and sharing their teacher and a taught. But plenty ofing—one teacher telling a bunch of experiences of how to improve it. people educate themselves. Is itchildren what to think. I think I The U.S. has been slow to join, possible for everybody to be an au-have glimpsed a better idea: the says Dr. Mitra, because Americans todidact, now that knowledge is soself-organized learning environ- tend to view the program as rele- accessible online? NewsComment (SOLE). vant only to the developing world. The credit for this approach be- But schools in a few states have Matt Ridley’s website islongs to Sugata Mitra, an Indian called on him to explain his ideas. A child in India uses a ‘hole in the wall’ computer.physicist who, a decade ago, beganto install public “hole in the wall”computers in Indian slums. Hethen watched how quickly the im-poverished kids learned to use thetechnology. The experiment, whichhas now gone global, inspired thebook that inspired the film “Slum-dog Millionaire,” in which a boyfrom the slums improbably learnsenough to win a TV quiz show. Dr. Mitra’s next brainchild,SOLE, takes this dynamic to theclassroom. He is convinced that,with the Internet, kids can learn bythemselves, so long as they are insmall groups and have well-posedquestions to answer. He goes intoschools and asks a question that hethinks the students won’t be ableto answer, such as: “How do youstop something moving?” or “WasWorld War II good or bad?”One child in front of acomputer learns little, fourdiscussing and debatinglearn a lot. He gives them no clue where tostart, but he insists the school re-strict the number of Internet por-tals in the class to one for everyfour students. One child in front ofa computer learns little; four dis-cussing and debating learn a lot.What happens next is entirely upto the students. All they know isthat Dr. Mitra is coming back to betold what they have found. He arrives with a second ques-tion that links the learning moreclosely to the curriculum, such as:“Who was Isaac Newton?” and“What’s the connection betweenNewton and stopping things mov-ing?” The kids teach themselvesthe laws of motion. Of course, theInternet is fallible as a source, butso are teachers and textbooks. Forthe noncontroversial topics thatmake up the curriculum, evenWikipedia is pretty good. In a village in Tamil Nadu calledKalikuppam, Dr. Mitra asked aclass of poor Tamil-speaking kidsto use the Internet, which they hadnot yet encountered, to learn bio-technology, which they had neverheard of, in English, which they didnot speak. Two months later hewas astounded at what they hadtaught themselves. In 2006, Dr. Mitra moved toEngland, became a professor of ed-ucational technology at NewcastleUniversity, and tested SOLE in
    • 12 THE WALL STREET JOURNAL. Monday, December 6, 2010 ON OTHER FRONTS Thailand potboilers hook China viewers BY JAMES HOOKWAY what else they can subtitle and real life.” AND WILAWAN WATCHARASAKWET beam across the Middle Kingdom. “Battle of the Angels” is a good Bangkok “I’m amazed,” says Takonkiet example. The plot revolves around Viravan, the 44-year-old Thai soap a group of flight attendant train- THAI SOAP opera called A opera svengali who pro- ees and follows their ro- “Battle of the Angels” cre- duced “Battle of the An- mantic quests as they try ated a stir when it was first gels” and other shows to carve out a career in broadcast here two years ago. Lo- now making it big on the the airline industry. Much cal trade unions and women’s small screen in China. of the action centers on groups were upset about the way He’s still being bom- Rin, a beautiful young the prime-time drama showed barded with inquiries, stewardess. She falls in flight attendants going about their “and they’re coming from love with a married pilot jobs, which appeared to consist all directions.” but weds his womanizing mostly of cat fights and devious What’s going on, TV friend instead, before fi- Exact Co. Ltd (2) schemes to woo pilots. analysts in the region sus- nally reconciling with her Now the series is enjoying a pect, is that Asia is start- primary love interest—all second life, in China—and network ing to outgrow its addic- Takonkiet the while evading a series executives there are banging on tion to Hollywood Viravan of traps set by her schem-‘Ning,’ a pilot, confronts ‘Rin’ in a scene from Thai soap ‘Battle of the Angels.’ the door of Thai producers to see hand-me-downs. ing rivals, Cherry and Noi. For years, Asian broadcasters In key scenes, the feuding LEGAL NOTICES have been relying on such U.S. im- flight attendants grind stiletto ports as the “CSI” dramas and heels into each other’s feet or go that old standby “Baywatch” to fill toe-to-toe in screaming matches out their programming schedules. that often explode in a flurry of Now, egged on by the popular- slaps or hair-pulling. ity of South Korean singers and Another big hit, “Scar In My BANKRUPTCIES actors in recent years, Asian Heart,” has a more romantic plot broadcasters are more comfort- line about an up-and-coming exec- able using their neighbors’ TV utive who falls for a nursing stu- dramas or music instead of Ameri- dent he first accused of embez- can fare. Some analysts figure the zling money from his elderly success of the Asian programs is grandmother and causing the the latest sign of Asia’s rising con- death of his fiancée in a traffic ac- fidence. cident. There are 31 episodes to Thailand’s over-the-top pot- find out whether the couple can boilers are the latest sensation. forget the past and make a go of They come across as both familiar their love. and exotic. Some critics of Thai lakorn—or Many of the stars are ethnic dramas—say they have created a Chinese, as are many Thai. But the taste for simplistic, hyped story Thai dramas are also resolutely lines. The labor union at Thai Air- outlandish, featuring divas rush- ways International PCL, mean- ing about the set trying to slap while, singled out “Battle of the each other with the spiky shells of Angels” for special criticism, say- the malodorous tropical durian ing it tarnishes the reputation of fruit as writers and directors flight attendants and is a far cry crank up the melodrama. from day-to-day life in the skies. “I love Thai shows. The ac- Thailand’s government, though, tresses are so beautiful and the is leaping on the success of shows leading men very handsome,” says such as “Battle of the Angels,” Jang Jing, a 44-year-old house- “Scar In My Heart” and “The Prin- wife from Beijing and an avid fan. cess” to help buttress its more “They also show that what goes conventional exports, such as sea- around, comes around—even if food and toasters. they seem a bit strange at first.” Prime Minister Abhisit Vejja- Thai soaps seem to succeed be- jiva flew to China in November, cause they are often brutally di- and signed an agreement with rect, whereas in everyday life Chinese government officials to many Asian cultures value sub- promote Thai soaps and exempt tlety and avoiding confrontation. them from foreign-content quotas “This is the escapism, the fan- that state regulators there some- tasy—the dramas are so direct times slap on broadcasters. and loud and so boom, boom, Scores of Chinese fans, mean- boom I hate you,” says Mr. Ta- while, flew to Bangkok in Septem- konkiet, who is managing director ber to surprise “Scar In My Heart” at production companies Exact Co. star Sukrit Viseskaew on his birth- Ltd. and Scenario Co. Ltd. “It day and helped him put on a party would never happen like this in at a local orphanage. A birthday party scene in the melodrama about flight attendants.
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 13 OPINION: REVIEW OUTLOOK A Korea-U.S. Trade Deal, At LastW hat a long, strange journey it’s that 2007 text are helpful. The trade in unions—to hijack debate on a compre- proved, and we’re told Mr. Boehner has been for the South Korea-U.S. cars was the main sticking point, espe- hensive deal covering almost all trade. suggested grouping this deal together free trade agreement. The two cially as Detroit worried about Korea’s Consider the main “victory” for Detroit: with pending agreements with Colombiasides announced this weekend that longstanding use of technical barriers Korea has agreed to let America phase and Panama in a single House vote. Thisthey’ve reached a deal on revisions to the like onerous safety standards to limit im- out its 25% tariff on pick-up trucks more would make it easier for pro-trade forcesdraft that was signed in 2007 but never ports. Negotiators have added a provi- slowly. That will come at a stiff price to in Congress to concentrate their politicalratified. It comes not a moment too soon, sion that ensures new environmental American buyers of those trucks, includ- capital.given the boost this will give to a U.S. standards proposed by ing many small busi- Mr. Boehner will bring a majority oreconomy stumbling its way to recovery Seoul over the past nesses that delayed more of his GOP Members alone, but Mr.and with tensions rising on the Korean three years won’t be- The pact’s changes purchases during the Obama will have to spend his own politi-peninsula. come de facto trade recession. cal capital to rebuild American public The saga also will serve as a lesson to barriers. weren’t worth the Some farmers have support for free trade and gain Demo-future U.S. Presidents on the importance Yet those marginal three-year delay. also become collateral cratic support. The President would beof trade leadership. Having campaigned improvements have damage. Seoul couldn’t much further along toward his goal ofagainst the pact in 2008, President come at a cost, espe- walk away from re- doubling American exports if he had sup-Obama nonetheless rediscovered its ben- cially since the 2007 text was so strong. opened talks empty-handed, and one con- ported this deal in 2008 and pressed itefits as a spur to growth once in office. Some of the new auto provisions are cession Korea extracted is a two-year de- through Congress in 2009.Yet by then he was forced to reopen ne- worse than what Detroit had before. Con- lay, to 2016, in eliminating tariffs on The failure in leadership was to sidegotiations as a way to justify his earlier spicuously, Korea’s current 8% tariff on some U.S. pork. with the United Auto Workers and otheropposition. The result is a deal that is imported U.S. cars—which would have American pork producers are excited unions against the national interest.slightly better than the excellent 2007 been eliminated immediately upon ratifi- about any deal, but they still would have Those who think they’ll lose from tradetext in some ways, but slightly worse in cation under the 2007 deal—now will be been better off under the 2007 text. Chil- always have the strongest motivation toothers. And this after a delay that has cut in half immediately but eliminated ean pork already enjoys lower tariffs lobby, while the consumers and busi-cost the U.S. global credibility on eco- only after five years. thanks to the Chile-Korea FTA and has nesses that benefit (such as Americannomic issues, not to mention the cost to Compare that to the European Union’s been gaining market share. The new tar- pickup truck buyers) are harder to orga-the U.S. economy. agreement with Korea, which is signed iff-elimination date also falls only six nize. Every American President since i i i and due to take effect next July. That months before Korea’s tariffs on EU pork Hoover in the 1920s has taken the broad The good news is that the 2007 agree- deal gradually phases out Korea’s 8% car will end under that deal, leaving Ameri- view, speaking up for those many tradement stays mostly in place. Korea still of- tariff over four years. That means that cans far less than the two-and-a-half beneficiaries.fers significant opening of its sheltered over the next few years Detroit will miss years they would have had under the ear- U.S. public support for freer trade haseconomy to American manufactured what would have been the advantage of lier text to get a marketing jump on their eroded amid the recession and the lackgoods, agriculture and services. Within zero tariffs compared to rates of 2% to competitors. of Presidential leadership. It is crucial forfive years of ratification the deal will 6% on EU cars, and toward the end of the i i i U.S. competitiveness in particular, andeliminate tariffs on 95% of the countries’ five-year period tariffs on EU cars will be These caveats should not deter Con- the world economy more broadly, thattrade in goods, and it also clears the way lower than on American cars. gress from ratifying what is still an ex- Mr. Obama and his allies make a strongfor greater trade in services by, for in- The biggest mistake Mr. Obama and cellent deal. Mr. Obama has asked Re- and unapologetic case that trade is in thestance, opening Korea’s banking industry. U.S. Democrats made was allowing one publican House Speaker-designate John best interests of American businesses Meanwhile, some of the changes to vocal domestic lobby—Detroit and its Boehner to assist in getting the pact ap- and workers. How to Shrink the U.S. DeficitD ebates over taxes and spending are Presidents and Congressional leaders sign its signature House GOP cam- at root about political philosophy: on, and in this case Democrats are already achievement un- The Deficit Problem paign proposal to How big should government be? in open revolt, while Republicans are say- touched. But this reduce spending Revenues and outlays as a percentage of GDP,How much income should it redistribute, ing nicer things than Mr. Obama is about is like doing a 1980-2010 to 2008 levels isand to whom? We mention this to explain his own commission. Pentagon budget already morewhy last Thursday’s report from U.S. Presi- The U.S. federal deficit problem isn’t review and ex- 30% stringent thandent Barack Obama’s deficit commission is hard to understand. In the short term, rev- cluding Iraq and what the commis-landing with such a predictable political enues have collapsed to 14.9% of GDP Afghanistan. Re- 25 sion recommends. Outlaysthud. thanks to the recession and feeble recov- publicans ought Mr. Ryan points This doesn’t mean that Co-Chairmen ery. Meanwhile, Democrats have raised to reject the re- 20 out that becauseAlan Simpson and Erskine Bowles haven’t spending to as high as 25% of GDP, a level port on those the commissionoffered some useful ideas, much better not seen since World War II. (See nearby grounds alone. Receipts starts from Mr. 15ideas overall than we feared. As conceived chart.) Faster growth should return reve- The deficit Obama’s spendingby former White House nues over time to 18% or commission is baseline, its pro-budget director Peter 19% (they have never more honest on 10 posed cuts areOrszag, the commission Faster growth, spending reached 21%), while Social Security, on 80 90 00 10 also fewer thanwas supposed to be a spending restraint and which a bipartisan advertised—onlyTrojan Horse for a value- cuts and entitlement program eliminations deal would be Source: The President’s Budget for Fiscal Year 2011 $1 in cuts for ev-added tax (VAT) to raise reform will do the job. can gradually reduce possible if Mr. ery $2 in tax in-federal revenues to a new outlays toward 20%. The Obama got behind it. Republicans are will- creases ($1.13 trillion in total tax hikes).and much higher level key variable here is eco- ing to cut the benefits of future retirees by The best strategy for Republicans is tothan their 18.5% or so modern average. nomic growth, which is why a tax increase changing the annual inflation increase for- take the commission’s better ideas and The idea was that the proposal would would be especially counterproductive. mula, but Democrats will have to be will- make them part of their own budget pro-sit on a shelf until deficits led to a Greek- Longer-term, the problems are the lib- ing to raise the retirement age and forgo a posals next year. GOP Senators and com-like crisis, the bond markets demanded ac- eral entitlements of Medicare, Medicaid, payroll tax increase. mission members Judd Gregg, Mike Crapotion, and the political class reached in des- Social Security, and, starting in 2014, The other place for potential common and Tom Coburn have endorsed the reportperation for the Simpson-Bowles deus ex ObamaCare, which will add about 20 mil- ground is tax reform. The deficit commis- on grounds that something has to be done,machina. Mr. Orszag and other liberals lion to the Medicaid rolls. Democrats want sion suggests cutting tax rates in return but this is the triumph of desperation overknow they need a VAT, or some other kind to keep these programs as they are and for closing tax loopholes, which would help experience.of new tax, to finance ObamaCare and pay for them with much higher taxes—first the economy and raise revenue by increas- Republicans won the recent election bytheir other spending ambitions. What they by balancing the budget at 25% of GDP, and ing the efficiency of the tax code. It would opposing tax increases, and the fastestwant is a political device to lure Republi- later by necessity at 30%, 40% or more. also improve tax equity. Many tax loop- way to lose that majority would be tocans into voting for it. The alternative—which we support—is to holes go to the affluent and powerful who break that promise. They should embrace Messrs. Simpson and Bowles rejected reform the programs and reduce their have clout in Congress, such as the mort- the cuts that make sense and write a bud-the VAT ruse, but their plan is still one of scope. gage interest deduction for $1 million get reflecting the priorities that won ma-those Beltway specials that fudges the de- Yet, incredibly, the Simpson-Bowles re- homes. Alas, Mr. Obama has shown no jorities in the House and in state legisla-bate over what government should do. In- port has almost nothing to say about the signs that his philosophy of “spreading the tures around the country. If Mr. Obamastead, it tries to package things that every- runaway health-care entitlements. This is wealth” can abide lower tax rates. wants to improve his fiscal record, he’llone dislikes in the hope that everyone will a bow to the left and the White House, Given this reality, we think commission cooperate and strike some deals. If heswallow the castor oil at the same time. which cut Medicare by $500 billion to fi- members Paul Ryan and Jeb Hensarling doesn’t, the voters will have a choice inSuch proposals never have a chance unless nance a corner of ObamaCare and wants are right to oppose the final report. The 2012.
    • 14 THE WALL STREET JOURNAL. Monday, December 6, 2010 OPINION In Defense of Scanners and Pat-Downs tor or trigger. “As far as the in- Flight facility in a cookie-cutter The airline industry, which box cutters and be able to hijack [ Journal Interview ] trusiveness and the invasiveness office complex (exact location blames depressed business travel planes. That’s why we hardened with John Pistole of the person, based on what we withheld at TSA’s request) near since 2001 on the airport “hassle” cockpits and hired federal mar- know, I don’t see us going further Washington. Floors of computer factor, shies from criticizing the shals. That’s also why we don’t than” current policy, he says. “I servers and intelligence analysts new security methods. Airlines want people to mix liquids to buildBY MATTHEW KAMINSKI don’t think we can, frankly. I here clear the names of up to two don’t want to be on the hook if a bomb.” think we’ve probably reached the million passengers flying within something goes wrong, either. The But why grope grandma? He Undisclosed location public limit.” or into the U.S. each day. This se- TSA never felt serious pushback says because the U.S. can’t be sure near Washington He’s also willing to study the curity system is only as good as until now, when a grass-roots al Qaeda won’t be able to recruit Fortunately, for him, John Pis- matter. Last week, TSA did what American and foreign intelligence movement began and spread on older terrorists. Mr. Pistole saystole seems to have a sense of hu- bureaucracies do, launching “a re- in the field. the Web. that the U.S. concern about bombsmor. This may be a job require- view” to see if the pat-down can Mr. Pistole adds that the Mr. Pistole says the new poli- hidden on bodies goes back toment now for the post of be, in Mr. Pistole’s words, “less in- agency is expanding the use of cies are an “urgent” response to 2004, when two Russian planesadministrator of the U.S. Trans- vasive and still have the same undercover agents, several thou- gaps spotted in security. The Nige- were brought down midair by fe-portation Security Administration. high level of confidence that we sand in all by now, to monitor the rian “underwear bomber,” who male Chechen suicide attackers.Along with a thick skin. do now that everybody’s been security lines for unusual behav- tried to blow up a Northwest “Yeah, it’s inconvenient,” he The agency is a political light- properly screened.” ior. Sniffer dogs are more widely flight over Detroit on Christmas says, but “for those who say it’sning rod and the butt of many New technology may bring deployed. But he draws the line Day last year, snuck a plastic ex- groping, I wonder how many havejokes over its approach to airport some relief, as well. The agency is at giving TSA officers the right to plosive in his pants; expanded actually been through it.” For thesecurity—especially since the TSA testing a next generation of Ad- sake of journalism, I opted out ofexpanded the use of full-body vanced Imaging Technology (AIT) the full-body image screen thisscreening machines and extensive that can spot foreign objects with- week at Washington’s Reagan Air-pat-downs, provoking a national out all the anatomical detail port to test this premise. Abacklash. thrown in. Amsterdam airport al- friendly screener patted me down Mr. Pistole takes full credit, or ready uses such so-called blob with “the back of my hand” in sen-blame, for this policy change. He’s machines, which show an outline sitive areas, and didn’t honor theless eager to claim credit for pop- of the body. “I’m a big proponent TSA’s invocation to run up theularizing a slang meaning for of those,” Mr. Pistole says but thigh until you meet resistance.“junk”—as in San Diego passenger adds that TSA finds that there’s My experience wasn’t bad, but Mr.John Tyner’s warning at his TSA too high a rate of “false positives” Pistole admits that isn’t always thepat-down, “If you touch my junk, with those devices now. Once the case.I’ll have you arrested.” Or for pop- software is perfected, he says, the He suggests that the outrage isularizing the notion of an over- existing AIT machines at airports a privilege in a country thatweening “Big Sis” (scrawled in near you can be simply repro- hasn’t been hit by terrorism since grammed. 9/11. “If that Northwest flight go- The rules on removing shoes ing into Detroit . . . had been suc-The head of the and laptops for an X-ray scan and cessful from a terrorist standpointTransportation Security handing over any liquids over a and killing everybody on board, few ounces will stay in place, but I’m not sure we’d be having theAdministration says TSA is looking for ways to avoid same discussion or the same de-inconvenience is a small those hassles one day. “What I’m bate,” he says. interested in is moving toward a In coming weeks, Mr. Pistoleprice to pay for safety. more precise, tailored approach, must make a different sort of con- using the best intelligence and the tentious call—whether to allow best tactics enabled by the best TSA screeners to form a unionmarker on a protesting passen- technology,” he says. “The goal is and get collective bargainingger’s naked back at a Salt Lake to be more precise, more cus- rights. “I’m open to it, sure, asCity TSA check last week) tram- tomer friendly, if you will,” he long as it doesn’t adversely im-pling on passenger rights. Or for adds. But the bad news: He won’t pact security,” he says, without re-inspiring the “Message from TSA” relax any of the checks for a vealing any more. He adds the em-Saturday Night Live skit that went while, if ever. ployees couldn’t strike. Butinstantly viral. Punch line: “The The debate over expanded unionization would also make itTSA: It’s our business to touch screening touches on the proper even harder to roll back a bur- Zina Saundersyours.” balance between safety and civil geoning government entity with “Oh, that’s funny,” says Mr. Pis- liberties. Some legal experts won- 55,000 employees and an annualtole, who is 54, with a dry smile. der whether the TSA violates the budget of $7.6 billion. Just look atHe’s from Indiana, so he’s not be- Fourth Amendment protection the U.S. Postal sarcastic. Reedy, with per- against unreasonable search and choose passengers for closer in- body checks are meant to stop an Seventeen of 453 U.S. airportsfectly combed hair and a light seizure. Mr. Pistole is bracing for spection based on their age, eth- encore. In recent years, “red have “privatized” security, bring-complexion, Mr. Pistole resembles a grilling on Capitol Hill and likely nicity, religion or sex. In other teams” from the Government Ac- ing in outside contractors. TSAa G-Man from a ’50s Hollywood legal challenges. words, to profile. countability Office, TSA and De- continues to set the rules forflick. He took over the TSA in late But some critics, such as the Israel uses profiling with suc- partment of Homeland Security’s them, so you’ll still have to submitJune, after a 27-year career at the former head of American Airlines cess. Aside from being arguably inspector general tested the previ- to the new screening measures.FBI, where he was deputy director Robert Crandall, question the unconstitutional, Mr. Pistole says ous screening policies and discov- But the move to opt out of thesince 2004. TSA’s methods from a security that can’t be replicated here. Is- ered other vulnerabilities. In one TSA, most recently announced by Patdowngate thrust this little- point of view. The agency treats rael is a small country with 50 incident, GAO officials snuck Orlando’s Sanford Internationalknown agent-turned-bureaucrat each and every passenger as an daily flights; America has 456 air- enough liquid explosives through Airport, highlights the agency’sinto the glare of cable lights. Sit- equal terrorist threat. As a result, ports and 27,000 flights. “It’s not security to build a bomb. The ma- reputation problem. The cliché im-ting down earlier this week, Mr. the vast majority of resources are as straightforward as in Israel terial was inert, but Mr. Pistole age of a TSA agent is a grumpyPistole offers good and bad news devoted to where little threat ex- where they have a lot of experi- says that “we face a determined government employee happy tofor America’s frequent travelers. ists. Mr. Crandall, among others, ence with how to separate” sus- enemy who is at adept at con- abuse passengers. The former first: There will be says that a more risk-based sys- pects, he adds, saying that terror- structing, designing, concealing “I feel bad for the men andno additional tortures. Cavity tem would discriminate between ists here don’t necessarily fit a bombs that blow up airplanes and women of TSA, who have beensearches or other more expansive potential threats by using com- profile. Examples include dirty kill people.” He says he felt an maligned over the years but arebody checks are out at least as mon sense and fresh intelligence bomber Jose Padilla and Okla- “urgent” need to act upon taking really just trying to make sure youlong as terrorist body bombs re- and spare the bulk of the public homa City bomber Tim McVeigh. office. and me and Nick [his press han-quire, as today, an external initia- the worst at airport security. The TSA considers physical But whether the controversial dler, seated to my left] get to Whatever system is in place, “you screening “a last line of defense.” AIT machine would even spot an their destination safely,” says Mr. won’t get 100% security,” he says, “If nobody else has identified this underwear bomb is a matter of Pistole. but that this approach would be putative terrorist,” whether the debate. TSA “never put it on Over Thanksgiving, the TSA ASI A less costly and more efficient than CIA or at the border, “then it’s re- someone and tested it,” Mr. Pis- braced for “opt out” protests re- Almar Latour, Editor in Chief, Asia TSA’s. ally up to us at the airport.” tole says. “I’m assured that . . . it’s garding the scanners. They never Peter Stein, Associate Editor Mr. Pistole calls his agency a This as-close-to-zero-risk-as- not a 100% guarantee but it gives materialized. Mr. Pistole says he Dean Napolitano, Senior Editor “risk-based, intelligence-driven or- possible approach reflects the po- us the best opportunity to pick it heard that there was “some posi- Hugo Restall, Editorial Page Editor ganization,” but he means some- litical reality of a country that up.” tive outpouring and appreciation.” Shawn Hiltz, Vice President, Marketing thing different by that than Mr. wouldn’t hesitate to second-guess Another indictment against this Agents even got holiday cards Alice Chai, Research Director Crandall. He says the TSA already him if there was a successful at- approach is that it’s purely reac- from kids traveling with their par- Connie Cheng, Operations Director draws on the latest intelligence to tack. Hence the “blunt force ap- tive. The shoe check, liquid bans ents. Simon Wan, IT Director pick out suspicious figures for proach,” says Mr. Pistole, adding and full-body “naked” scan are The message from the TSA Olivier Legrand, General Manager Digital special screening. Earlier this that, “I’m sorry for the inconve- specific responses to the use of boss: The next time a man or Christine Brendle, Publisher week, the agency took over from nience to those people who feel specific weapons deployed by ter- woman in blue gets warm and Published since 1889 by the airlines the task of identifying like their privacy or their civil lib- rorists. “We are fighting yester- friendly with you at the airport Dow Jones and Company passengers on “no fly” and watch erties have been abridged or nega- day’s battles,” Mr. Pistole con- check, give some love back. © 2010 Dow Jones & Company. All Rights Reserved lists through its Secure Flight pro- tively impacted, but for me it re- cedes, “because we have to. gram. ally comes down to trying to save Because we don’t want a group of Mr. Kaminski is a member of thejk I met Mr. Pistole at the Secure lives.” 19 to get on different planes with Journal’s editorial board.
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. ** 15 OPINION A Win-Win Election in TaiwanBY CHARLES E. MORRISON jeou and his efforts to improve re- voters. Washington, with many lations with Beijing. Had the KMT other issues now complicating its While it is common to look for lost one or two of the hotly con- relations with Beijing and with“win-win” solutions in other con- tested races in the north, it would heightened tensions in Korea, alsotexts, elections rarely fit into this have been widely interpreted as a benefits from stable cross-Straitparadigm. However, both the rul- rejection of Ma and his policies. pan-blue Kuomintang and the The DPP was disappointed not The Taiwanese public mood to-opposition pan-green Democratic to have won an additional city, but ward Beijing will be much moreProgressive Party emerged as win- it received 50% of the total vote severely tested in March 2012ners in the Nov. 27 elections for compared to 45% for its rival. It when Taiwan’s presidential elec-mayor, city councilor and ward also equaled the KMT’s perform- tions take place. Although Tai-leader in Taiwan’s five major cit- ance in winning 130 city council wan’s economy is booming at 9%ies. So did Taiwanese democracy. seats. In general, the outcome re- per annum, Mr. Ma undoubtedlyBut the longer-term outlook for affirmed the party’s resurgence will face a tough re-election chal-cross-Strait ties remains clouded. following disastrous performance lenge. His approval ratings are of the DPP’s one and only presi- weak at 35%, and he has alienated Associated Press dent, Chen Sui-bian, now con- the KMT’s “deep blue” wing fol-Beijing needs to take victed of corruption and in jail, lowing his 2008 election by cen- and thus the DPP also emerged as trist policies on both domestic andmore comprehensive a winner. personnel issues. They will notcross-Strait steps to Taiwan’s still relatively new de- Taiwanese President Ma Ying-jeou campaigns with Taipei Mayor Hau Ling-bin. vote against him, but many may mocracy is also a winner. There sit out.reassure Taiwanese voters. was an assassination attempt, but a viable competitor without em- to the economic sphere as China The respectable DPP perform- this was deeply shocking to Tai- phasizing its traditional indepen- continues to develop its military ance proves that the opposition is wanese and out of character with dence theme. capabilities in the Taiwan Strait. a formidable, growing force. At In the traditional sense, the the general tone in which cam- Mr. Ma’s efforts to improve Beijing and Washington should least two of the losing mayoralKMT was the clear victor, winning paigning and voting had been cross-Straits relations was osten- both be relieved by the election candidates are strong potentialthree of the five mayoral races and peaceful with very few irregulari- sibly not at stake. Although the results, and in this sense both are DPP presidential candidates. Theydefending its northern strong- ties. DPP formally opposes the Eco- winners too, at least for now. Al- can now devote their full energiesholds against a determined DPP The DPP has made determined nomic Cooperation Framework though Beijing is developing rela- toward the race ahead, not sad-challenge. While mayoral races efforts to change its image as a Agreement that Mr. Ma recently tionships with the DPP and has dled by day-to-day mayoral re-may seem less important than na- radical, even violent party, using concluded with the mainland, it been improving its understanding sponsibilities or with governancetional elections, they did involve almost dreamy imagery, including did not make this an issue. In fact, of Taiwanese politics in recent records to defend. The outcome ofabout 65% of Taiwan’s registered hearts and references to “love.” Its many small businesses in the DPP years, the Chinese remain more that race will be the definitive ref-voters, making them somewhat advertisements in the north fea- base will benefit from the agree- comfortable with the KMT and erendum on Mr. Ma’s leadership,analogous to the U.S. mid-term tured more pink than green. While ment and are now taking advan- suspicious of its rival. with broad implications for cross-elections. Thus, while the issues many in the KMT and independent tage of the explosion of Chinese The KMT mayoral victories Strait relations and the future ofwere usually local or personality circles are suspicious that this re- tourism following the earlier inau- avoided a serious setback for Bei- the U.S.-Taiwan-Mainland Chinadriven, the elections were also a flects more tactical maneuvering guration of direct flights. The KMT jing’s favorite Taiwan party, but triangle.test of nationwide party strength than true conviction, the DPP is also did not stress the improve- they also illustrated the challengesand appeal as well as an indirect becoming a more normal opposi- ments in cross-Strait economic re- ahead. Beijing needs more com- Mr. Morrison is president of thereferendum on the policies and tion party, engaging the KMT on a lations, partly in recognition that prehensive cross-Strait steps to East-West Center in Honolulu,leadership of President Ma Ying- broad range of issues and proving progress has largely been limited appeal to and reassure Taiwanese Hawai‘i. Down Under, Summing Up ple”—a term coined in 1942 by tralia is about to enter its 20th con- mess: 14.4% inflation, 5.4% boom arrived, adding demand for [ Bookshelf ] the country’s longest-serving secutive year of growth. unemployment and a budget defi- Australia’s abundant raw materi- prime minister, Robert Menzies, It’s a record few outside Aus- cit. Federal spending had risen als and giving the country an- to describe “salary-earners, shop- tralia know much about, mostly 46% over two years. Mr. Howard other boost. keepers, skilled artisans, profes- because the reforms happened slashed spending and freed gasoline Mr. Howard did more than just sional men and women, farmers.” over a long stretch of time and prices but also raised taxes. His ef- reshape the economy, however. In It was precisely because of Mr. Australia is a long way away from forts weren’t enough to turn things Washington on a state visit on Howard’s ordinariness that he re- anywhere. Mr. Howard’s book may around, and the Liberal govern- 9/11, he was whisked to a bunker alized something extraordinary: not help much: Too often it reads ment fell in 1983. By that point, under the Australian embassy on that Australia would only prosper like an insider’s political diary, Mr. Howard had had a free-market Pennsylvania Avenue. The next if it empowered people like his and it rarely takes up events out- “epiphany.” day he and his wife, Janette, were parents. side Australia. Unfortunately for him and for the only guests in the public gal- The thought dawned early. In That’s a shame because, de- the Liberals, so had the Labor lery as Congress debated what to 1954, the local council ordered his spite the plodding prose, “Lazarus Party. The Bob Hawke and Paul do. Mr. Howard soon invoked the father to remove roadside pumps Rising” tells an impressive story Keating governments came to em- U.S.-Australia security treaty and from his gas station to make way of political grit and economic brace economic reform, slash sent troops to Afghanistan and for a traffic light. The edict achievement. Mr. Howard tried trade barriers and welcome more Iraq. Throughout his tenure as crippled the business—and the twice to get the Liberal Party’s immigration. The Liberals fell into prime minister he was a stalwart lights weren’t installed until the nod to run for office. He internal disarray and public bick- supporter of the “freedom early 1960s. “The incident rein- succeeded the first time, but lost ering. In an intra-party coup, Mr. agenda” and an outspoken ally of forced the feeling in my family that the election. His party shunned Howard was deposed as George W. Bush and Tony Blair in governments, generally speaking, him on his second attempt. In opposition leader in 1989. It the war on terror.Lazarus Rising weren’t all that sympathetic to 1974, he got the nod and finally wasn’t until 1995 that the party There are a few moments ofBy John Howard small business; that if you had one, won. He entered Parliament at the turned to him again, in despera- waspishness in “Lazarus Rising.”HarperCollins, 711 pages, $59.99 you were very much on your own,” heyday of Gough Whitlam’s Labor tion. Mr. Howard says that United Na- Mr. Howard writes. “Big companies government. At the time Australia As the Australian economy tions weapons inspector Hans BlixBY MARY KISSEL could look after themselves and had a wage-fixing board, high tar- slowed later that decade, Mr. was a “company man” and Al unions were strong, but the little iff barriers and government-set Howard’s free-market message Gore “arrogant and overbearing.” There is nothing extraordinary bloke got squeezed.” interest rates. Mr. Whitlam gained popularity, and he was He finds Mr. Bush “persuasive,about John Winston Howard. Born In his memoir, “Lazarus Ris- wanted yet more government reg- elected in 1998, becoming prime well-informed, attentive andin a Sydney suburb to a World ing,” Mr. Howard, who sat atop ulation, a national health-care minister. With the help of an able charming” in private but “stiltedWar I veteran and his wife, he Australian politics from 1996 to system and more welfare. Treasurer, Peter Costello, he made and unpersuasive” in public. Hegrew up in an ordinary “Califor- 2007—a tenure whose length is As the economy predictably the central bank independent, bal- also takes a few punches at hisnian bungalow,” prayed with the second only to his hero, Menzies— imploded and Australia faced the anced the budget, privatized in- long-time No. 2, Mr. Costello,Methodists, played cricket and explains how his Liberal Party and possibility of financial meltdown, dustries, freed trade and, most mostly for disputes over whoread adventure stories. Mild deaf- the opposing Labor Party over Britain’s governor general took important, tackled labor-market should have led the party into theness made law school a chore, and several decades steadily shed that the extraordinary step of reform. “The goal,” Mr. Howard 2007 election. These blows seemhe couldn’t hear well enough to web of big government, high taxes, deposing Mr. Whitlam—an act writes, “was to remove, progres- beneath a man who has achievedargue at the bar. He became a protectionism and unionism and that rankles Laborites to this day. sively, the speed limits on the so much. Mr. Howard is clearlysolicitor and wooed a local opened Australia up to immigra- In the Liberal administration that growth of the Australian economy, one of the forgotten people whoschoolteacher. tion, foreign capital and market followed, Mr. Howard was named by increasing its flexibility and will be remembered. Mr. Howard and the members competition. Today, as the U.S. and a minister and, eventually, Trea- enhancing the supply-side factorsof his family may be counted Europe limp along, the results are surer (the equivalent of America’s that are fundamental to our pro- Ms. Kissel is a member of the Jour-among Australia’s “forgotten peo- nothing short of breathtaking: Aus- Treasury secretary). He faced a ductive capacity.” Then the China nal’s editorial board.
    • 16 THE WALL STREET JOURNAL. Monday, December 6, 2010 IN DEPTH Limited consequences Federal inspectors find thousands of minor and serious violations on drilling rigs and oil platforms every year, but only a tiny fraction of those result in civil penalties. 2004 ’05 ’06 ’07 ’08 ’09 Total: 3,212 2,531 2,620 2,435 2,244 1,662 Serious: 1,481 1,370 1,191 1,180 1,192 849 Fines: 24 36 54 67 67 30 Amount: $885,750 $796,600 $1.48 million $3.10 million $2.21 million $919,000 Source: Bureau of Ocean Energy Management, Regulation and EnforcementU.S. oil-rig inspectors leftadrift in safety-reform pushThey have been undermined by managers and outmatched by the sheer number of offshore installations they oversee New Orleans Enforcement, has teams of employees andS months after the Deepwater Ho- EVEN consultants working to redesign the inspec- rizon exploded in the Gulf of Mexico, tion program, and hopes to have a plan by the troubled federal agency that over- early next year.sees offshore drilling has been revamped, While the causes of the Deepwater Hori-renamed and given a new leader with a zon disaster remain in question, investiga-mandate to turn what critics called an in- tors are pointing to a complex series of hu-dustry lapdog into an effective watchdog. man errors, including the design of the well and the failure to recognize problems with By Leslie Eaton, cement that was supposed to keep natural Stephen Power gas from flowing into the well. Crucial And Russell Gold safety barriers, such as a final cement plug, were not installed or were removed; work- But there’s at least one big change the ers aboard the rig misinterpreted key testsagency hasn’t made: fixing its deeply and failed to notice warning signs.flawed inspection program. As it has for No one knows if a more robust and so-four decades, that program sends inspec- phisticated inspection program could havetors armed with little more than checklists detected these problems or prevented theand pencils into the Gulf to ensure the explosion. But there is broad agreementsafety of more than 3,500 oil platforms and among safety experts that a massive over-drilling rigs. haul is needed to create the kind of inspec- A Wall Street Journal examination finds tion program that can help avoid such di-that these inspectors have been overruled sasters in the industry, undermined by their own man- “They need to concentrate more onagers and outmatched by the sheer number safety management systems and safety cul-of offshore installations they oversee. In- ture as opposed to just on equipment,” saysspectors come into the job with little or no Ken Arnold, an engineer who served on anhands-on experience in deep-water drilling, advisory panel that recommended changeslearning as they go. to the inspection program back in 1990. The small cadre of 55 or so inspectors, “That is a very hard thing to do.”who are largely checking hardware, get Offshore drilling has changed substan-good marks for reducing workplace injuries tially since the government inspection pro-on rigs and platforms. But safety experts gram was created following a spill off thesay the main causes of major accidents are coast of California in 1969. Oil company en-almost always human error, not the me- gineers onshore can monitor what happenschanical failures that inspectors focus on. on the rigs and platforms, minute by min-Inspectors aren’t looking for signs of sys- ute. High-tech equipment and subsea robotstemic safety problems—poor decisions, cut- allow rigs to float above a well a mile orting corners, muddled responsibilities—that more under the surface and to drill ininvestigators are linking to the Deepwater freezing temperatures and high pressureHorizon explosion. into once-unreachable rock formations. The agency “thought all we needed to do Inspecting, however, has stayed much Agence France-Presse/Getty Imageswas to go through the motions,” says Perry the same.Jennings, a former inspector who is now Inspectors are mostly former oilfieldpresident of the New Orleans chapter of the workers without college degrees, have littleAmerican Federation of Government Em- formal training and aren’t required to passployees, which represents rig inspectors. any certification tests; they are expected to“And, guess what? It’s come back to bite learn their craft by shadowing more experi-them.” enced peers. They have almost no direct ex- On Thursday, the staff of the presiden- perience in the specialized field of deep-wa-tial commission looking into Deepwater Ho- ter drilling, and, during offshorerizon issued a scathing critique of how the Michael Bromwich, right, director of the U.S. agency that oversees drilling. inspections, have no access to technologyU.S. oversees offshore drilling. It faulted more advanced than a pocket calculator.the government for skimping on money for istration to revamp the Minerals Manage- How to improve the agency is a matter Failed inspections seldom result in fines,the agency, called inspector training “inade- ment Service, says that most inspectors of dispute. Republican lawmakers caution which tend to be low to begin with. Lastquate and unacceptable” and recommended were diligently doing their jobs. that throwing more money into the agency year, inspectors wrote up 2,298 violationsa wholesale change in the way the agency But, he acknowledges, the effort was in- wouldn’t be a silver bullet and are likely to offshore, but only 87 were referred on forapproaches safety regulations. adequate: “As operations offshore became resist a major funding bump. Mr. Bromwich possible fines, according to an Interior De- Michael Bromwich, the one-time federal more sophisticated, our inspection regime says the agency, now called the Bureau of partment report. The agency levied civilprosecutor recruited by the Obama Admin- did not keep pace.” Ocean Energy Management, Regulation and penalties in 20 cases last year, totaling
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 17 IN DEPTH$919,000—less than the cost of one day’sdrilling aboard the Deepwater Horizon. Inspectors can shut down operations forsafety reasons, which can cost energy com-panies far more than the fines. But to doso, inspectors need permission from theirmanagers—and some former inspectorscomplain about having been overruled. The agency’s inspection manpower forthe Gulf of Mexico is concentrated in fivedistrict offices stretching 400 miles (about645 kilometers) along the coast from NewOrleans to Lake Jackson, Texas, south ofHouston. Much of inspectors’ time offshore isspent reviewing paperwork and copyingdata—such as how much oil is beingpumped or dates on which equipment wastested—by hand from printouts and logs.They make sure first-aid kits are on board,and that any open holes in the deck haverailings to prevent falls. They are also supposed to check safetyequipment such as gas alarms and watchthem being tested by rig workers “as condi-tions and time permit.” Many inspectorsuse a laminated check-list of potential vio-lations to look out for—the one for drillingincludes almost 150 items. Many inspections are relatively brief.The last inspector to visit the DeepwaterHorizon, Eric Neal, spent just two hours onApril 1 aboard the high-tech 32,600-ton,multi-level installation. That was about thesame amount of time a visiting group of ex-ecutives would take to tour the rig on April Eliot Kamenitz/The Times Picayune20, the day of the disaster. The 33-year-old Mr. Neal had visited therig only once before, with his father, whowas training him and is also an inspector.He told federal investigators that he feltmore qualified to inspect the installationsthat produce oil and gas than he did drill-ing rigs, which in the last decade have be-come increasingly high-tech and complex as Eric Neal was the last inspector to visit the Deepwater Horizon more than two weeks before it exploded. Safety experts say the main causes of majorthey have moved into deeper water. accidents are almost always human error, not the mechanical failures that inspectors focus on. Below, ships worked in June to try to stem the oil spill. As part of cost-cutting measures in the1990s, the agency started requiring inspec-tors to be generalists, rather than specializ-ing in specific types of installations likethey used to. Mr. Neal declined to comment, and theagency would not make him or other in-spectors available for interviews. “In the beginning the job was to makesure people were performing in safe condi-tions,” says Cynthia Thompson, who startedout as a technician at the agency in NewOrleans more than 25 years ago and saysshe became its first female inspector in1997. “I didn’t go out to be quick, I’d go outto be thorough.” Offshore workers sometimes resisted herefforts, she says; many energy companiesgive out bonuses to their workers when in-spectors don’t write up any violations. “I’d tell them, ‘I don’t live here, you do,’”says Ms. Thompson, who retired at the endof 2004 after being injured in a helicopteraccident. Inspectors and their managers have a Agence-France Presse/Getty Imageslong history of being courted—and pres-sured—by industry executives and low-levelrig workers, many of whom went to thesame high schools, attend the samechurches and cheer for the same little-league teams as the inspectors, former in-spectors have said. The coziness also hasbeen noted in reports by the Interior De-partment’s inspector general. When Mr. Bromwich arrived at the re-vamped agency in June, he vowed to tackle risen to 58, with seven new hires pending. The approach, known as “safety case,” panies pay to fund inspections—an idea“the reality and appearance of” conflicts of The plan is to add a total of 30. Mr. Brom- puts the burden on companies to prove to that has drawn the industry’s opposition.interest at the agency. He set up an internal wich has gone on trips to five colleges regulators that they have identified risks Some industry leaders, including Rex Til-investigations unit to root out misconduct, along the Gulf Coast to try to recruit engi- and developed procedures to cope with lerson, the chief executive of Exxon Mobiland began requiring inspectors to disqualify neering students. One obstacle: The agency them—before the companies can receive Corp., say they want competent regulators.themselves when they have personal or is restricted by federal salary guidelines, permission to drill. Inspectors and auditors The industry’s powerful lobbying group, thefamily ties to a company. Inspectors on day and so can’t offer competitive pay to at- are supposed to keep an eye on whether American Petroleum Institute, says it sup-trips offshore now have to bring their own tract highly educated inspectors. Salaries the company is doing a good job policing it- ports giving the agency more money, butlunches, and are no longer allowed to ac- for most inspectors start at $47,448. Engi- self, and whether any deficiencies are being that the funding should come out of the bil-cept free food aboard rigs. neering-school graduates command far communicated to senior executives. lions of dollars the industry already pays in The agency is also developing a system more when they go to work for the energy Mr. Bromwich has said that adopting this taxes and track violations and ensure they’re cor- industry. This year’s graduates of Louisiana approach wholesale would be disruptive for Key congressional Republicans are skep-rected, and has asked Congress to increase State University’s petroleum engineering years. Either way, paying for any changes is tical about increasing the agency’s budgetcivil penalties. Next year, offshore operators school, for example, were offered an aver- likely to be a problem. Congress has given at a time of cost cutting. “The question Iwill be required to have detailed safety age of $94,000 for industry jobs. the agency $365 million for the current fis- have is, what specifically are these inspec-plans that the agency can review and en- Some safety experts, including members cal year, about $23 million more than last tors going to do and how it will ensure weforce. The agency recommended this policy of the presidential panel investigating the year’s budget, but well short of the $100 have production?” says Rep. Doc Hastings,almost two decades ago but never imple- oil spill, have suggested that the agency million boost that the Obama administra- a Washington Republican who is likely tomented it. borrow an approach adopted by the U.K. af- tion had sought. become chairman of the House Natural Re- A new training program is being de- ter a 1988 platform explosion killed 167 The administration has proposed finding sources Committee. “What I’ve seen so farsigned for inspectors, whose number has people. more money by upping the fees that com- doesn’t clarify that at all.”
    • 18 * * THE WALL STREET JOURNAL. Monday, December 6, 2010 FROM PAGE ONEU.S.-Korea pact fortifies relationship Continued from first pageway trade, which amounted to $69 Auto imbalancebillion last year, by $10 billion or Annual passenger-car imports,more, and slightly narrow South Ko- in billionsrea’s surplus with the U.S. To clinchthe deal, South Korea agreed to new U.S. from South Koreasteps to open its auto market to U.S. South Korea from U.S.producers. Chief among those steps $9was that it will allow U.S. makers tosell as many as 25,000 vehicles ayear using U.S. safety standards 6rather than Korean ones. South Korea’s auto rules are amix of domestic, U.S. and European 3standards that have stymied foreignmanufacturers because they require 0modifications to a small volume of 2005 06 07 08 09production. As a result, foreign Sources: U.S Census Bureaubrands account for only about 6% ofoverall vehicle sales in South Korea, European Pressphoto Agencymaking it one of the most closedauto markets in the world. The top- South Korean Trade Minister Kimselling U.S. brand in South Korea, Jong-hoon speaking about the SouthFord Motor Co., sold 3,100 units Korean and U.S. trade agreementfrom January through October, during a news conference in Seoul onabout 0.2% of the overall market Sunday.volume of approximately 1.2 millionvehicles. Mr. Obama had hoped to secure a America,” Mr. Obama said in Wash- were winning or losing. The intense The U.S. Chamber of Commerce, restart imports in 2008, the deci-revised agreement during his trip to ington on Saturday. “We don’t sim- score-keeping became an extra chal- which has frequently feuded with sion sparked riots that were drivenAsia last month for the G-20 summit ply want to be an economy that con- lenge for Seoul’s negotiators since the White House, put its muscle be- by a sense among South Koreanshosted by South Korea. The talks sumes other countries’ goods.” the country’s tariffs were much hind the modified agreement. “The that Washington had bested Seoul,foundered, in part because South South Korea’s pursuit of free- higher to start with than those in administration has done its part. rather than by health concerns.Korean officials had told the Korean trade agreements with the U.S., the the U.S. Adding to the sporting- Now it’s time for the new Congress South Korea limited its purchasespublic for weeks they would make European Union, Canada and others event-like environment of the pro- to make passage of [the pact] a top of U.S. beef to cuts from cattleno compromises. Mr. Obama left in recent years has been driven by cess, South Korean TV stations built priority in January. We will do ev- younger than 30 months, which areSeoul empty-handed, but the ap- both the desire to increase exports anchor booths in the parking lots of erything in our power to round up perceived to be at less risk of mad-pearance that the U.S. was willing to and to create internal pressure to the hotels where negotiators met the votes,” said Thomas Donohue, cow disease. U.S. beef sales in Southwalk away from the entire deal change non-tariff barriers and other and the leaders of the two negotiat- president of the U.S. Chamber of Korea are now nearly as high asalarmed South Koreans, officials in regulations that have become a drag ing teams were trailed by cameras Commerce. they were before the initial ban inSeoul said. on the economy. and reporters like rock stars. The agreement changed little, 2003, but some American lawmak- The pact gives a lift to Mr. Since the start of the U.S. talks in “It’s over. It’s over,” Mr. Kim, who however, on the issue of U.S. beef ers and industry officials object toObama’s efforts to double U.S. ex- 2006, the focus of the South Korean was the lead negotiator in the U.S. exports. South Korea banned U.S. any limits at all.ports by 2015. “Essential to that is public has been less on the eco- talks before becoming trade minis- beef after a case of mad-cow disease —Elizabeth Williamsonopening new markets around the nomic outcome than on perceptions ter, said in English as he walked out was found in Washington state in in Washington contributedworld to products that are made in of whether their trade negotiators of his news conference. 2003. When South Korea agreed to to this article.India presses for access to key BlackBerry data Continued from first page states and areas affected by a wide-companies had discussions with the spread Maoist insurgency. OnlyHome Ministry, which oversees do- Rapid growth about 3% to 5% are for white-collarmestic-security issues. Total number of wireless investigations, he said. RIM already has provided a solu- subscribers in India, in millions Mr. Pillai said he will likely pur-tion for its BlackBerry Messenger sue some changes to the country’schat service that will be in place by 700 telecom laws to clarify the govern-the end of January, Mr. Pillai said, ment’s authority for intercepts ofand gaining lawful data access to 600 highly secure corporate communica-BlackBerry’s corporate-email service tions, part of a broader set ofwill likely take longer than January 500 changes related to lawful interceptbecause of the technology involved. policy and privacy. “If we can get the data as real- He said the government has also 400time as possible, that’s good enough initiated discussions with otherfor me,” Mr. Pillai said, but he cau- communications providers whosetioned that if he doesn’t get a satis- 300 services it has had trouble gainingfactory technical solution—either 2009 ’10 access to, including Google Inc. andthrough BlackBerry directly or its Sources: Telecom Regulatory Authority of India; Skype. The government has receivedcorporate customers—“then that European Pressphoto Agency (photo) assurances from all players it hasservice will then go, because I can’t reached out to that they will doafford to have a black hole.” whatever possible to respond to A spokesman for RIM in India detailed yet by the government on data for certain users at the govern- pabilities have been in the spotlight lawful surveillance requests, he said.cited the company’s Dec. 3 state- its deliberations over BlackBerry, ment’s request. The government in recent weeks after wiretapped A spokesman for Skype couldn’tment, in which it said, “RIM has no are a reprieve for RIM as it tries to said it wanted a solution by Aug. 31 phone conversations between a cor- be reached for comment.ability to provide the customers’ en- maintain its position in India, a but later stretched the deadline as porate lobbyist and powerful Indian A spokeswoman for Google Indiacryption keys” for BlackBerry enter- market with 688 million wireless RIM promised modifications. politicians and journalists were said, “We evaluate requests on aprise email. The statement also said subscribers and increasing demand India can already monitor phone leaked to the local media. case by case basis. Our goal is toIndia had agreed RIM shouldn’t be for advanced smartphones such as calls, text messages and consumer Mr. Pillai said he approved the provide our users access to informa-“singled out” from other companies BlackBerrys. RIM has more than 50 email on BlackBerrys, just as it can wiretap as part of an investigation tion and also to protect the privacywith secure data services running million subscribers globally but do for other telecommunications into tax-evasion and potential con- of our users. Whenever we receive aon corporate networks and that any doesn’t release figures for India. services in the country. nections to a controversial alloca- request, we first check to make surenew moves to obtain lawful access The Indian government earlier Various intelligence and investi- tion of mobile- phone spectrum by it meets both the letter and spirit ofto that data should be applied in- this year threatened to ban Black- gative agencies have authority to the Indian telecom ministry. He said the law before complying.”dustrywide. Berry corporate-email service and initiate landline or mobile-phone government agencies are investigat- Mr. Pillai said the government Some Indian media reports have BlackBerry Messenger because their wiretaps of suspects in cases rang- ing how the leak of the recordings has faced a challenge getting up tosaid that Jan. 31 is the deadline for high levels of encryption—or data ing from terrorism to drug-traffick- happened. speed on new technologies andBlackBerry to comply with the gov- scrambling—made them too difficult ing, with the approval of Mr. Pillai Mr. Pillai said about 6,000 to keeping up with the “bad guys” asernment’s surveillance require- for intelligence agencies to inter- in the Home Ministry. A board that 8,000 wiretaps are happening in In- they try to take advantage of everyments, after which RIM would face cept. includes the telecom secretary, cabi- dia at any given time, with roughly loophole in India’s surveillance ca-a service shutdown. But Mr. Pillai India first raised publicly the net secretary and law secretary re- 80% aimed at gleaning information pabilities.said that date is “more of a target” prospect of a BlackBerry service ban view Mr. Pillai’s authorizations ev- about potential militant activity in “Technology is changing,” hethan a hard deadline. in August, pressing RIM to make ery two weeks, he said. the restive Himalayan region of said. “The crooks are always one Mr. Pillai’s comments, the most available encrypted corporate email India’s domestic surveillance ca- Kashmir, troubled northeastern step ahead.”
    • As of 4 p.m. ET Euro 1.3384 À 1.61% Yen/US$ ¥82.66 g 1.52% Yen/A$ ¥81.70 g 0.01% Oil 89.19 À 1.35% Gold 1405.40 À 1.22% 10-year Treasury g 5/32 yield 3.016% 3-month Libor 0.30344 Mining firms race to bulk up Tokyo struggles to keep as they scramble for resources manufacturing at home BUSINESS& FINANCE. BUSINESS & FINANCE 20 HEARD ON THE STREET 30Monday, December 6, 2010 THE WALL STREET JOURNAL. asia.WSJ.comAs bonds flag, stocks gain fansBY MARK GONGLOFF economic reports has raised hopes from bonds to stocks may be less Stopping the flow of a stronger recovery, which would forceful than some expected, many After a stellar two-year run, the mean higher interest rates and a ro- observers still think stocks havebond market is stumbling and a Weekly net new cash flow to bond mutual funds bust stock market. Some relatively more juice than bonds, as long asnumber of investors are betting that $15 billion bearish economists and strategists, the economy keeps recovering.stocks will post better returns in the including those at Goldman Sachs, “It is getting to a point where itcoming months. have recently raised their outlooks will start to get tough for credit to Among the signs being held up 10 for growth and interest rates. outperform equities, given the lowas evidence: Investors in the past Investment-grade corporate level of yields,” said Ashish Shah, a two weeks pulled bonds in November had their worst co-head of global credit investmentABREAST OF money from bond 5 month since February 2009, losing at AllianceBernstein, noting thatTHE MARKET funds for the first 0.8%, according to Barclays Capital high-yield bonds yield less than 8%, time in almost two 0 indexes. Treasurys and high-yield near their lowest levels in decades.years, and there are indications of a bonds also took losses in their worst Money left bond mutual funds ingrowing move toward stocks. months since March and May, re- the two weeks through Nov. 23, ac- Economic data have been robust, –5 spectively. cording to the Investment Companyand even Friday’s weak jobs figures 2009 10 Only bank loans, which have Institute, the first outflows sinceweren’t enough to derail the trend Source: Investment Company Institute floating rates and tend to outper- December 2008, roughly when thein favor of stocks over bonds. form when rates are rising, had pos- bond bull market began. The long string of bad headlines itive returns in November. Even seemingly bulletprooffor bonds left the 10-year Treasury rope, are reminders that any decline but hasn’t started to sell off yet,” The Dow Jones Industrial Aver- emerging markets have sufferednote yield above 3% on Friday for in the bond market could come as a said Howard Simons, bond-market age has rallied nearly 18% since July bond-fund outflows for two straightthe first time since late July. Bond slow leak rather than a loud strategist at Bianco Research in Chi- 2, including a 2.6% gain last week, Please turn to page 25yields rise as prices fall. But the burst—if it happens at all. cago, referring to bonds. “It’s fray- which held up despite Friday’s jobsjobs numbers, along with nagging “Right now we’re still in a bull ing around the edges.” data. Volatilty to remain high in Treasuryworries about sovereign debt in Eu- market that’s very tired and at risk, A series of surprisingly positive Even if the much awaited shift market ......................................................... 24AIG’s second effort to sellNan Shan has local drama [ The View Nan Shan Life Insurance From Hong Kong ] Information as of September 2010BY PETER STEIN n Total assets: NT$1.7 trillion (US$56.17 billion) It took n Total policies in force: 8 million American International n Policyholders: 4 million Group Inc. several n Branches: 24 attempts to get it right when it tried n Agency offices: 500to sell off its flagship Asian life- n Market share: 10.3%*insurance arm. Nailing its secondattempt at selling off its Taiwan *As of November 2009 Source: The companybusiness may depend on whetherregulators are willing to keepAIG’s deal an all-local affair. On Friday, three buyers and the result was a mess. AIGsubmitted bids for AIG’s Nan looked like it wrangled a goodShan Life Insurance Co.: Cathay deal when it agreed to sell theFinancial Holding Co., unit for $2.15 billion, a price wellChinatrust Financial Holding Co., above market expectations, to aand Ruentex Group, a consortium of two Hong Kongconglomerate with interests in partners. But from the start,textiles and real estate. AIG has controversy dogged the buyers,invited a fourth bidder, Fubon private-equity firm PrimusFinancial Holding Co., which Financial Holdings Ltd. andhasn’t yet disclosed whether it is China Strategic Holdings Ltd., ain the race. shell company backed by some Now that AIG has successfully wealthy Hong Kong investors.taken AIA Group Ltd. public, Taiwan regulators finally rejectedraising $20.5 billion in a Hong the sale in August.Kong offering, there is less You could misread that deal’spressure to move quickly on Nan death as a warning sign forShan, though the imperative overseas investors eyeing theremains the same. AIG needs to Taiwan market to stay out. Insell assets to pay back U.S. much of Asia, financial servicestaxpayers for the insurance giant’s can be a tricky sector for foreign2008 bailout. With its previous buyers, as Australia & Neweffort to sell off the Taiwan Zealand Banking Group, AIG wasn’t so careful Please turn to page 23
    • 20 THE WALL STREET JOURNAL. Monday, December 6, 2010 BUSINESS FINANCEMining companiesrush to become largerBY ROBERT GUY MATTHEWS $1 billion, cashing in on growing de- tion] activity that we’ve seen overAND KRIS MAHER mand in Asia for fertilizer. the last few months,” said Jeremy The number and financial value Sussman, a coal analyst with Brean Banking on prolonged strength of acquisitions within the mining in- Murray, Carret & the commodities market and dustry have been rising steadily Gold is particularly attractive be-rapid industrialization among over the past few months, reaching cause it is getting increasingly hardemerging economies, mining compa- their highest totals since March to find good ore grades from exist-nies are deploying the cash reserves 2008, according to Metals Econom- ing mines.accumulated during a stretch of ics Group, which monitors and In the two-month period of Sep-strong prices to quickly buy other tracks trends in resources. tember and October, gold companiesminers or launch joint ventures. “Right now, we are at a time alone announced 40 acquisitions, The deals range from gold to when a lot of these commodities tend compared with 28 in the combinedcoal and stretch from Canada to to do well, so there is a fair amount July and August period, represent-China as mining companies move to of confidence in the industry,” said ing a 43% increase, according to In- Bloomberg Newsquickly snare limited resources and Michael Chender, the chief executive dustry Monitor, a mining-industrydevelop new ones. On Friday, sev- of Metals Economics of Halifax, Novia publication.eral multibillion-dollar deals were Scotia. “The majority of people be- The estimated resource value ofannounced or sealed. Australia- lieve demand will continue to rise, those same deals was $97.9 billion inbased Andean Resources Ltd.’s along with sustained high prices for the more recent two-month period, up A Walter Energy coal conveyor in Alabama. The company is purchasingshareholders approved a $3.58 bil- metals and minerals.” from $18.7 billion in July and August. Canadian rival Western Coal in a $3.3 billion cash-and-stock deal.lion buyout by Canada-based Gold- Mr. Chender also said there is an Gold’s sustained high price, hover-corp Inc. Walter Energy Inc. an- element of herd mentality, with com- ing near $1,400 an ounce, accounts downturn in 2008. making every region, no matter hownounced a $3.3 billion panies concerned about falling be- for the spate of deals, analysts said. “We’ve had 18 months of spectac- dangerous, attractive,” including Af-cash-and-stock acquisition of Cana- hind. “Somebody will move and then Acquisitions are also strong for ular earnings,” he said. “Major and ghanistan.dian rival Western Coal Corp., cre- you will see a plethora of deals be- base metals, such as copper and mid-tier producers are getting cashed One way to lessen the risk andating a metallurgical-coal giant with hind it, because there is a general zinc. During the two-month period up quite nicely.” cost is to set up joint ventures, such385 million tons of coal reserves. sense that people are concerned of September and October, there Moreover, building a mine is be- as those announced Friday by Rio The world’s third-largest miner, about losing out.” were 20 announced acquisitions, coming more difficult because of po- Tinto.Rio Tinto, made two announce- But a more fundamental reason mostly for copper, compared with 13 litical and social concerns, as well as The lack of infrastructure is alsoments. It said it would both form a behind the activity is a strong belief announcements in the July and Au- worries about fickle foreign govern- playing a large role in companies’joint venture with Aluminum Cor- in continued demand from emerging gust period, according to Industry ments changing rules. rush to secure resources. The raceporation of China Ltd. to explore markets, including China, India and Monitor. “Getting a social license to coop- for metallurgical-coal assets has be-mineral resources in China and ex- second-tier countries such as Tur- Tom Whelan, a partner at Ernst erate has become so difficult,” says come more urgent because ports inpand its joint venture with Sinos- key. China is a huge consumer of & Young’s mining-and-metals prac- Glenn Ives, chairman of Deloitte & Australia have become congested,teel Corp. to mine ore in Australia. raw materials and a big developer of tice said that these deals stem in Touche in Canada and head of its tightening supplies, and industry of-And, according to a person familiar those same raw materials. part from a cash buildup among North American mining group. Still, ficials say existing infrastructure inwith the matter, Australian miner “There’s no question that China mining companies. Commodity he said, mining companies are will- other parts of the world might notLegend International Holdings Inc. has an insatiable appetite for raw prices for iron ore, copper, zinc, coal ing to take risks because of strong be up to meeting future looking to sell its phosphate materials that is driving the signifi- and other metals and minerals re- prices. —Alison Tudormines for between $500 million to cant surge in [merger-and-acquisi- covered quickly after the economic The high commodity prices “are contributed to this article.Samsung Electronics promotes its chairman’s sonBY JUNG-AH LEE company also promoted Chief Exec- flat-screen television sets and is the pardon after being charged with tax high as 4.4% to 897,000 won on Fri- utive Choi Gee-sung to vice chair- second-largest maker of cellphones evasion and indicted over financial day. The stock closed up 4.1% at SEOUL—Samsung Electronics man. Mr. Choi, 59 years old, will by shipments behind Nokia Corp. irregularities at the group in 2008. 894,000 won.Co. has promoted the chairman’s continue as chief executive. Jay Y. Lee was educated at Har- Also Friday, the group said it will “In addition to the expectedonly son, Jay Y. Lee, to president “Today’s appointments are vard Business School, joined Sam- set up an organization called the turnaround in the global liquid-crys-from executive vice president, a aimed at leading the way through sung Electronics in 1991 and was Samsung Corporate Strategy Office. tal-display industry where Samsungmove designed to refresh the com- the rapid changes of the 21st cen- promoted to executive vice presi- The office will be led by Kim Soon- is the leader, [Friday’s] news thatpany’s executive ranks in a challeng- tury,” Samsung said. dent and chief operating officer in taek, a former chief executive at the company conducted a manage-ing global market. Samsung Electronics is the flag- late 2009, just a few months before Samsung SDI, a maker of recharge- ment reshuffle is boosting Samsung Samsung said in a written state- ship company of South Korea’s top his father Lee Kun-hee returned as able batteries. Mr. Kim will oversee shares,” said HI Investment & Secu-ment that the younger Mr. Lee, 42 conglomerate, Samsung Group, and chairman of the group’s flagship and manage group-wide affairs. rities analyst Lee Sang-hun.years old, will continue to retain his the world’s largest maker of com- technology unit in March 2010. The After the management changes, —In-Soo Namrole as chief operating officer. The puter memory chips. It also makes senior Lee received a presidential Samsung Electronics shares rose as contributed to this article. INDEX TO BUSINESSES AND PEOPLEBusinesses Baidu...............................3 European Aeronautic Loch Capital Samsung Group............20 Bernanke, Ben..............24 Peters, Gregory ............ 25 Shen Xiangrong............32This index of businesses Bank of America...........29 Defence & Space.......21 Management..............29 Samsung SDI................20 Bisignani, Giovanni.......21 Piccuta, Dan....................3 Simons, Howard...........19mentioned in today’s Bona Film Group...........29 Facebook ....................... 23 Lone Star Funds...........23 SemiLEDs......................29 Slosar, John..................21 Bronczek, David............21 Radwan, Sam................23 Broadband Research.....29 Fast Retailing...............25 MetLife ......................... 23 Sinosteel.......................20issue of The Wall Street Camp, James ................ 25 Sussman, Jeremy.........20 Calvin Klein...................22 First Republic Bank......29 Microsoft.........................3 Sky-mobi.......................29 Ruia, Shashi....................4Journal is intended to SPDR Gold Shares........32 Cassidy, Gerard.............29 Thin, Win........................5 Cathay Financial Holding Ford Motor....................18 Morgan Stanley............29 Schaffrath, Stefan........21include all significant Fubon Financial Holding Nan Shan Life Insurance Sumitomo Heavy Tyler, Tony .................... 21 .......................................19 Chan, Rita.....................20reference to companies. .......................................19 .......................................19 Industries...................30 Shah, Ashish.................19 Whelan, Tom.................20 Cathay Pacific Airways 21 Swire Pacific.................21 Chender, Michael..........20First reference to the ChicagoBreakingBusiness Goldcorp........................20 News Corp.....................23 Shatz, Joseph...............25 Yongkang, Zhou..............3companies appears in Goldman Sachs Group Nikon.............................25 Targa Resources...........29 Choi Gee-sung .............. 25 .com............................23 United Parcel Service...21bold face type in all ..................................20,29 Nokia........................20,30 Christian, Jeff...............32 China Coal Energy........25 Vedanta Resources.........4articles except those China Shenhua Energy.25 Google...................3,18,23 Groupon.........................23 Olympus........................25 Posco...............................4 Walter Energy .............. 20 Cohen, Steven...............29 Corrections Amplificationson page one and the China Strategic Holdings Western Coal................20 Donohue, Thomas.........18 Hana Financial Group...23 Primary Global Research Yahoo.............................23editorial pages. .......................................19 Huadian Power .......................................29 Glionna, Jonathan ........ 29 Rita Chan is executive director of debt Chinatrust Financial Gottlieb, David..............24 capital markets for Goldman Sachs in International..............25 Primus Financial Holding.......................19 Huaneng Power Hansen, Sally................22 Hong Kong. A Business & Finance articleAIA Group.....................19 Holdings.....................19Air France-KLM.............21 Citigroup ....................... 29 International..............25 Procter & Gamble.........30 People Ives, Glenn....................20 Thursday misspelled her surname as Datang International ICICI Bank.......................6 Prudential PLC..............23 This index lists the Chen, and incorrectly said she is basedAlibaba Group...............29 Power Generation ..... 25 Kinnucan, John.............29 James Hardie Industries Qantas Airways............21 names of business- in Beijing. In addition, the article didn’tAluminum Corporation of Diamondback Capital Lee, Jay Y.................20,25 .......................................25 Research in Motion........1 people and government note that part of the reason that credit China..........................20 Management..............29 Lee Kun-hee.............20,25 J.P. Morgan Chase........29 Rio Tinto.......................20 regulators who receive ratings within China equate to lower ................. 29 Dow Chemical...............23 Korea Exchange Bank...23 Rolls-Royce...................21 significant mention in Lee Sang-hun...........20,25 ternational ratings is because companies’American International E-Commerce China Legend International Ruentex Group..............19 Group..........................19 Today’s Journal. Lester, Simon ................. 6 international credit ratings are con- Dangdang...................29 Holdings.....................20 SAC Capital Advisors LPAndean Resources........20 Essar Group .................... 4 Lopez, Jennifer.............22 strained by the sovereign ratings of their Lentuo International....29 .......................................29Australia & New Zealand Euromonitor Level Global Investors LP Samsung Electronics Abbott, Kathy...............21 Mason, Andrew ............ 23 home countries, according to Goldman. Banking Group...........19 International..............22 .......................................29 ..................................20,25 Beckham, David............22 Murenbeeld, Martin ..... 32
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 21 BUSINESS FINANCEQantas drama fuels cockpit lessonsSafety experts say pilot-training programs tend to overemphasize computer aids and scrimp on fundamental skillsBY ANDY PASZTOR In releasing its preliminary find- safety experts increasingly worryAND DANIEL MICHAELS ings last week, the Australian Trans- that many pilots don’t get enough port Safety Bureau praised the practice using stand-by instruments An old-fashioned manufacturing crew’s response and said it contin- in a crunch.defect appears to have caused the ues to look at damage to various The problem, these experts say,explosive engine failure on a Qantas portions of the plane, as well as the is that computer-savvy pilots tendAirways Ltd. airliner last month, response of computer systems and to become complacent and oftenbut the damage to vital onboard sys- automated flight controls. don’t have adequate experience withtems is prompting new concerns Rolls-Royce said in a statement manual controls to keep planes fromabout increasing reliance on cockpit Friday that the agency’s findings stalling or going into other types ofautomation. “are consistent with our own public hazardous upsets. The National Veteran pilots at the controls of statements,” and the company reit- Transportation Safety Board for Australian Transport Safety Bureauthe twin-deck Airbus A380 with 469 erated it is cooperating with investi- years has urged airlines to revamppeople aboard grappled with a rapid gators and regulators “to ensure simulator sessions to counteractcascade of electrical and computer- compliance with safety standards.” those vulnerabilities.system failures they were never spe- An Airbus spokesman said the According to Ms. Abbott, manycifically trained to handle. The un- plane suffered far more damage pilots are reluctant to abruptly takeusually large crew of five avia- than it had been designed to handle. over from computers primarily be-tors—including some of the airline’s “The degree of damage is impres- cause they recognize their lack ofmost senior captains—relied on dis- sive, and the resilience of the air- experience hand-flying sophisticatedcipline, calm teamwork and in the An oil leak sparked the explosion last month that shredded the engine of this craft is also impressive,” said jets and especially worry aboutend, manual flying skills to turn a Qantas Airbus A380 and flung metal chunks through the wing. spokesman Stefan Schaffrath. Airbus making mistakes under such unfa-harrowing situation into a safe is a unit of European Aeronautic miliar circumstancesemergency landing. “pilots sometimes abdicate too of computerized warnings in the Defence & Space Co. The results are evident in global But international air-safety offi- much responsibility to the auto- cockpit. Air France-KLM SA and United accident statistics. James Burin,cials are now mulling whether the mated systems,” according to Ms. The problems stretched from Parcel Service Inc. are among the head of technical programs for theNov. 4 incident presents broader Abbott. Part of the reason, she said, malfunctioning flight-control panels big operators that previously re- Flight Safety Foundation, said thatlessons about ways airlines and reg- are persistent messages from airline to reduced braking power to the vised training to make pilots more the most-frequent types of fatal air-ulators can help less-experienced pi- management and trainers stressing crew’s inability to dump fuel. On- comfortable grabbing control away liner crashes continue to be thoselots react properly if flight-manage- that “automated systems can do the board computers repeatedly failed from computers in certain emergen- associated with “loss of control” orment computers and automated job better than” pilots. to reliably predict landing distances cies. “lack of control” by flight crews.controls suddenly go haywire. By contrast, the Qantas crew in- with problematic brakes. And during Still, many industry officials say Based in Alexandria, Va., the founda- The debate comes as U.S. safety stinctively reverted to rudimentary the final 1,000 feet before touch- computer-related issues are the tion is widely considered the leadingexperts wrap up a sweeping study airmanship—often called stick-and- down, the autopilot kicked off and ones most likely to resonate with industry-supported air-safety advo-concluding that many pilot-training rudder skills— when one of their the captain manually maneuvered regulators, airlines and pilot groups. cacy organization.programs tend to overemphasize four Rolls-Royce PLC Trent 900 en- the stricken jet. Air France-KLM SA and cargo car- Most of the time, loss of controlcomputer aids but scrimp on drilling gines blew apart minutes after de- According to investigators, the rier United Parcel Service Inc. are accidents are associated with pilotfundamental flying skills. parting from Singapore. Australian captain recognized that “accurate among the big operators that previ- confusion or hesitancy in dealing After analyzing more than 730 investigators believe an undetected speed control on final (approach) ously revised simulator sessions with computer changes or glitches.incidents, 26 accidents and thou- oil leak, resulting from an improp- would be important” to avoid either with the aim of making pilots more And they frequently involve flying insands of flights world-wide going erly machined tube, ignited and led dangerously slowing down too much comfortable coping with emergency bad weather, darkness or over wa-back to 2001, Kathy Abbott, the Fed- to internal failures that shattered a and losing lift, or ending up too fast situations without computer assis- ter, when pilots have few if any vi-eral Aviation Administration’s chief turbine disk weighing several hun- to stop on the runway in light of the tance. As part of routine training, a sual clues about an airplane’s posi-technical adviser for flight-deck de- dred pounds and spinning at high jet’s battered condition. The plan re- UPS spokesman said, “we take them tion relative to the horizon.sign, told a recent safety conference speeds. At least three massive metal lied on a delicate maneuver: the through no-automation maneuvers These automation-induced acci-that too many pilots rely excessively chunks flew out of the engine and crew opted to land without pulling so they can demonstrate their flying dents are “killing a lot of people,on automation. One cross-cutting through the left wing. The frag- up the nose of the plane at the last proficiency.” and we need to get them under con-theme of the study, featuring broad ments, according to investigators, minute, a typical move that bleeds Even as manufacturers strive to trol,” Mr. Burin told the same indus-participation from unions, carriers, caused a fuel leak, severed key elec- off speed and smooths out the initial make jetliners more efficient and try conference in Milan, Italy lastmanufactures and regulators, is that trical systems and prompted dozens touchdown. automated, airline officials and month.Cathay Pacific’s chief to step downBY JOANNE CHIU HONG KONG—The head of Ca-thay Pacific Airways Ltd. is step-ping down next year to lead the in-ternational airline industry’s mainlobby group, the first representativeof an Asian carrier to hold the post. Cathay Chief Executive Tony Ty-ler was chosen to become director-general and CEO of the Geneva- Bloomberg News Bloomberg Newsbased International Air TransportAssociation, or IATA, succeedingGiovanni Bisignani on July 1. Mr. Bisignani, a former head ofItalian flag carrier Alitalia, has been Tony Tyler, left, will head IATA. John Slosar will succeed him as Cathay’s outspoken critic of governmentaltax and regulatory policy since tak- when he steps down March 31. The year as demand for air travel re-ing on the IATA role in 2002. He has airline said it has yet to name a new bounded sharply along with the re-repeatedly called for the airline in- chief operating officer. vival in international trade.dustry to be treated like other in- Mr. Slosar, 54, who is originally Cathay said last month that itdustrial sectors, and also steered its from the U.S., was managing direc- expects its 2010 earnings to morework on climate-change initiatives. tor of Swire Pacific Ltd.’s beverages than double the company’s 2009 to- Mr. Tyler, a 55-year-old British division before joining Cathay Pa- tal, and also said it will boost capac-citizen, has run Cathay since 2007. cific in 2007. He joined Swire, which ity to meet demand. Last year, theHe joined the Hong Kong-based car- is Cathay’s controlling shareholder, carrier posted a net profit of 4.69rier in 1978. Mr. Tyler also has in 1980. billion Hong Kong dollars ($604 mil-served as IATA chairman, a position Mr. Tyler steered Cathay through lion), reversing a loss of HK$8.7 bil-typically filled by top executives of one of its toughest stretches in its lion in 2008, its worst year to datemember airlines on rotating basis. more-than-60-year history when the in terms of earnings. David Bronczek, IATA’s current global financial crisis led to a sharp In a message to Cathay staff, Mr.chairman, said Mr. Tyler’s knowl- fall in air-passenger travel and glo- Tyler said that with his retirement JULES AUDEMARSedge of Asia “will help IATA take bal export volumes. The airline cut age looming he was attracted by the EXTRA-THINadvantage of opportunities in the capacity and ordered no-pay leaves opportunity to stay involved in theindustry’s largest market.” for employees in a bid to save costs. aviation industry, although he added John Slosar, Cathay’s chief oper- The airline’s fortunes improved the decision to leave the airline is “aating officer, will succeed Mr. Tyler starting in the second half of last wrench” and “tinged with sadness.”
    • 22 THE WALL STREET JOURNAL. Monday, December 6, 2010 CORPORATE NEWSCoty includes China in makeover planBY ELLEN BYRON tial for Coty?AND DANA CIMILLUCA Mr. Beetz: We see growth opportuni- ties in established markets and in Coty Inc. is nearing a deal to buy emerging markets. There are stillChinese skin-care company TJOY, major opportunities in developedpeople familiar with the matter said, markets; for example, Central Eu-in what would cap a three-week ac- rope is doing very well right now.quisition binge led by Chief Execu- Eastern Europe is back. We havetive Bernd Beetz at the closely held major upside in Asia. We also seefragrance giant. major growth opportunities in the Mr. Beetz is trying to remake one U.S. in department stores, especiallyof the world’s biggest fragrance with our prestige fragrance portfo- makers into a diver- lio. I think we can gain even moreBOSS TALK sified beauty com- market share there. pany. In November, it announced three WSJ: Naysayers say the popularitymajor deals, most recently a of celebrity fragrances is waning.planned purchase of nail-polish What do you think?maker OPI Products Inc. in a deal Mr. Beetz: I never shared this pointpeople familiar with the matter val- of view. Right now I am particularlyued at near $1 billion. encouraged with the success we are Katie Orlinsky for The Wall Street Journal It also agreed to buy skin-care having with Beyoncé and Hallebrand Philosophy Inc., which people Berry, and I think we’ll have a majorclose to the deal also valued at success with Lady Gaga next year.around $1 billion, and disclosed The category is very much alive withplans to buy German beauty firm Dr. the right project.Scheller Cosmetics AG for an undis- I would not dispute that someclosed sum. other marginal projects don’t make Coty was planning to announce it or disappear, but we are verythe TJOY deal Sunday or Monday, happy with the category. Look ataccording to the people familiar. The Jennifer Lopez. It’s now in its 10thcash-and-stock deal values the Bernd Beetz, above at Coty offices in New York, is seeking to remake the fragrance giant into a diversified beauty firm. year and doing extremely well.closely held Chinese company at Some of her earliest fragrances, likeabout $400 million. As with all such pers. Mr. Beetz: Not fundamentally. I think Glow, are still around. If the projectdeals, this one could still fall apart. Coty, which makes fragrances un- WSJ: What’s your strategy for navi- it is a business very much driven by really has legs and substance, it can Buying TJOY, which offers men’s der celebrity names including Jenni- gating the holiday season? trends, so you have to be even absolutely become a classic.and women’s skin-care products, fer Lopez and David Beckham and Mr. Beetz: I sense less uncertainty. I closer than ever before to the mar-would give Coty access to an array designer labels such as Calvin Klein, expect shoppers to buy at least what ketplace. It’s also helpful to have WSJ: What metrics do you use toof well-known brands and distribu- as well as Sally Hansen nail polish they did last year, though I think it’s bigger projects with a bigger focus evaluate whether a celebrity fra-tion in the fast-growing Chinese- and N.Y.C. New York Color cosmet- going to be better. and fewer launches. Big blockbust- grance will be a success?market. Although the deal is small ics, posted sales of $3.6 billion in its ers also help the business. You have Mr. Beetz: It’s a multitude of Western standards, it will be a fiscal year that ended June 30. Mr. WSJ: How has the mind-set of the to keep entertaining the consumer. We have been disciplined in findingrelatively large deal in China, which Beetz recently spoke with The Wall luxury consumer changed during the out what the market is asking for,has proven challenging for many Street Journal. recession? WSJ: You had mapped 2010 to be what the consumer wants in termsWestern companies to penetrate. Excerpts: Mr. Beetz: I don’t think the basic the year you hit $5 billion in sales. of a fragrance, and then we choose Mr. Beetz, a 60-year-old German mind-set has changed. There is a That didn’t happen. What’s your the right talent to work with us andnative who has led Coty since 2001, WSJ: You’ve been a busy deal maker. certain compromising during the outlook now? commit to the project. The celeb-is rapidly expanding into skin care What’s motivating your shopping crisis, so there is some trading down Mr. Beetz: We would have been there rity’s involvement is crucial. Halleand makeup as the fragrance indus- spree? or pausing with purchases, but the without the big global crisis. Over- Berry is excellent at personal ap-try continues to struggle. Last year, Mr. Beetz: We’re doing very well basic attitude hasn’t changed. This all, we have a big sense of accom- pearances. I was with her in Warsawglobal sales of premium fragrances right now, so I think it’s a good time consumer wants to indulge them- plishment, because all the key mea- recently, and we had almost 50,000totaled $20.3 billion, down 6.5% to use the momentum to further ex- selves and reward themselves with surements we put in place worked people show up. We also look at afrom the year before, according to ecute our strategy. We always said a piece of luxury. It can be a hand- out. celebrity’s affinity with the beautymarket-research firm Euromonitor we wanted three pillars: fragrances, bag or a nice lipstick or a perfume. We have a new roadmap to 2015. category.International Inc. color cosmetics and skin care. We benefit from it right now. We have grown in the last nine Heading into the crucial holiday years, with average revenue growth WSJ: How do you keep up with ce-season, when the majority of fra- WSJ: Rumors of Coty doing an IPO WSJ: In recent years fragrance has of 15%. It’s true that the crisis was a lebrities who might make for a goodgrance sales happen each year, Mr. have circled for years. Do you want been among the worst-performing bit of a pause, but we overcame that fragrance?Beetz is betting that an emphasis on to go public? categories in beauty. Can manufac- and are back on track. Mr. Beetz: I read all the celebritynew celebrity fragrances and some Mr. Beetz: We have no immediate turers do something differently to magazines, mostly when I’m on theclassics will win over hesitant shop- plans, but we’d never exclude that. boost the business? WSJ: Where do you see sales poten- plane. The Power List The top business leaders in Asia making headlines last week in select global and regional media. Powered by Dow Jones Factiva and edited for relevance and clarity. OLEG DERIPASKA AKIO TOYODA KAZUO INAMORI KAREN AGUSTIAWAN PANSY HO Chief Executive President Chairman Chief Executive Partner UC Rusal Toyota Motor Japan Airlines PT Pertamina MGM China Holdings Mr. Deripaska pulled the Hong Kong Mr. Toyoda unveiled the auto maker’s After a court approved the carrier’s Pertamina signed a deal with Exxon The joint venture between MGM listing of his EuroSibEnergo, in a sign Etios sedan in India and said the restructuring, Mr. Inamori said JAL will Mobil to develop the offshore East Resorts International and Ms. Ho, that the city’s IPO rush might be country “is a key market for our overall still need additional capital. Natuna Block, and Ms. Agustiawan daughter of Macau casino magnate weakening. strategic growth plans.” said the Indonesian company was in Stanley Ho, is targeting a Hong Kong talks with other potential partners. IPO in the first quarter at the earliest. Photos: Associated Press (Ho); Bloomberg News (Deripaska, Toyoda, Inamori, Agustiawan) Compiled by Carlos Tejada/ The Wall Street Journal
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 23 CORPORATE NEWSIndia leans on Dow Chemical Google, GrouponAttorney general seeks to force company to pay an additional $1.1 billion for Bhopal accidentBY GEETA ANAND end talksAND ARLENE CHANG Google Inc.’s multibillion-dollar MUMBAI—India’s attorney gen- bid to acquire local deals site Grou-eral asked the country’s supreme pon Inc. ended Friday as the twocourt Friday to force Dow Chemical sides broke off talks, according to aCo. to pay an additional $1.1 billion person familiar with the victims’ compensation and envi-ronmental-cleanup costs related to By Amir Efrati,an industrial accident that killed Gina Chonand injured thousands of people in and Geoffrey A. FowlerBhopal in 1984. In the “curative petition,” Attor- Negotiations between the twoney General Goolam E. Vahanvati companies heated up over the pastasked the court to intervene “to week but Groupon’s board, many ofcure gross miscarriage of justice whom are investors, was divided onand perpetration of irremediable in- whether to accept Google’s offer.justice being suffered by the victims The company continued to con-of the Bhopal gas tragedy,” which sider remaining independent andwas caused by a toxic-gas leak at a pursuing an IPO in the future, peo-pesticide plant in central India. ple familiar with the matter have The attempt to boost compensa- said. European Pressphoto Agencytion follows an uproar in India ear- reported earlier that the deal waslier this year, when a district court off. A Groupon spokeswoman didn’thanded out only two-year jail sen- immediately respond to a requesttences to executives of Union Car- for comment.bide India Ltd., a subsidiary of Union A Google spokesman declined toCarbide Corp., which owned the comment.plant where the accident occurred. AllThingsD previously reportedIn June, the court found seven exec- Survivors protested in Bhopal, India, on Friday, the 26th anniversary of the gas leak that killed and injured thousands. that Google offered $5.3 billion forutives of the company guilty of neg- Groupon, with a further $700 mil-ligence leading to death, the first Mich., denied responsibility for any Friday is largely based on the fact money should not be used to meet lion to be based on Groupon’s abilityand only verdict in an Indian crimi- additional payments. “The 1984 gas that many more people were injured the liabilities of Union Carbide,” he to hit certain performance mile-nal case related to the disaster. release in Bhopal was a tragedy of and killed in the accident than was added. stones. Union Carbide, which divested it- such immense and unprecedented estimated in 1989, when the civil The 1989 settlement also didn’t News Corp. owns the AllThingsDself of its Indian subsidiary’s stock scale, it is understandable that an- court calculated compensation. address environmental hazards tied website, as well as The Wall Streetin the 1990s, was acquired by Dow ger and grief remain more than a The court assumed there were to the leak, Mr. Kamat said. The In- Journal.Chemical Co. in 2001. quarter of a century later. It is ex- 2,000 deaths, he said, but 5,300 dian government estimated it would Groupon, a closely held company The public furor over the sen- tremely disappointing, however, people were actually killed in the cost $70 million to clean up the haz- based in Chicago, has grown rapidlytences led the Indian government to that the government of India has gas leak. And, while the court calcu- ardous waste Union Carbide left at by getting local businesses to spendset up a committee headed by Home chosen to seek legal action that lated in 1989 that 50,000 people the site, he said, and it is seeking money online to attract consumers,Minister P. Chidambaram to review would be both unjust and contrary were injured, it turns out 520,000 that from Dow Chemical, too. a market Google has sought to crack.the compensation paid to victims. to law,” the company said in a state- were injured, the lawyer said, add- Mr. Kamat said the attorney gen- The online market for local busi-The committee recommended seek- ment. ing that “it was an obvious error in eral offered the court several calcu- ness advertising is expected to growing more money, prompting the at- The company argued that it had computation by the court.” lations for reparations owed to vic- rapidly and is coveted by other largetorney general to file the “curative no involvement in the Bhopal trag- Because many more people were tims. They range from $666 million Web companies including Facebookpetition” on Friday. edy, which occurred 17 years before killed and injured, he added, the to $1.3 billion, based on different in- Inc. and Yahoo Inc. In 1989, a civil court ordered Dow acquired stock in Union Car- compensation ordered by the court flationary indexes, among other Groupon, led by its co-founderUnion Carbide to pay $471 million to bide, and that “the rationale for was spread over a lot more people things. Andrew Mason, hit upon a new busi-the victims. The lengthy process of holding Dow responsible is appar- and individual victims received less The attorney general’s petition ness model by mobilizing a force ofverifying the claims led some vic- ently based on a fundamental mis- money than the court intended. will be heard in chambers by three more than 1,500 sales and customertims to receive payment as late as understanding of the relationship India’s government also seeks senior supreme-court judges, who service employees to call and deal2007, according to Devadatt Kamat, between Dow and Union Carbide $387 million in reimbursement for will decide whether the case merits with restaurants, tanning salons,a lawyer for the attorney general’s Corp.–which are, and have always payments it has made to victims for a review. The hearing is unlikely to and helicopter tour been, separate companies.” relief and rehabilitation over the occur before the court recesses Dec. —Joann S. Lublin Dow Chemical, based in Midland, Mr. Kamat said the claim filed years, Mr. Kamat said. “Taxpayer 16. contributed to this story. MARKETSAIG effort to sell Nan Shan likely hinges on local buyers Continued from page 19 are eager to peddle the island’s at- also notes that Ruentex’s owner tive.recently experienced. ANZ looked tractions at a time when mainland previously made money investing Regulators might resist consoli-set to acquire a 51% stake in Ko- China lures away so much foreign in the insurance business. But dation, given that two of the bid-rea Exchange Bank from Lone investment. they are unlikely to win the day. ders, Cathay Financial and Fubon,Star Funds but lost out late last “By far, the FSC’s preference is Less than two months ago, the already have “negative spread” is-month when an unexpected South a solid foreign buyer with insur- FSC rejected plans by another sues. Future capital requirementsKorean buyer, Hana Financial ance expertise,” says Sam Rad- small Taiwan player to buy the lo- could make that problem worse asGroup Inc., came in and sealed wan, managing partner of En- cal unit of U.S. insurer Metlife Taiwan moves to adopt stricterthe deal for $4.1 billion. hance International LLC, a Inc. for $112.5 million, citing its standards, Mr. Radwan says. In Nan Shan’s case, being for- consultancy focused on insurance lack of “professional abilities.” Should regulators balk, AIGeign hurt the buyers in one sense. in Taiwan and mainland China. Given AIG’s experience, inviting could look at taking Nan ShanRumored connections to mainland Unfortunately for Taiwan, for- yet another FSC rejection would public.Chinese backers, a sensitive issue eign insurers have headed in the be foolhardy. It worked with AIA, Taiwan and a possible violation opposite direction for some time, AIG will therefore probably AIG first tried selling AIA directlyof local law, stirred controversy. dumping local subsidiaries when- push for a local bank—Cathay Fi- to interested buyers but couldn’t(Both Primus and China Strategic ever possible. nancial, Fubon or Chinatrust—as get the price it wanted. Then itdenied such connections.) Offi- That’s because the sector is its best option. Where foreigners worked on an IPO. Then it pulledcially, Taiwan regulators cited saddled with old money-losing see liabilities, these banks, which the IPO after agreeing to sell AIAdoubts about the acquirer’s finan- policies that offer guaranteed in- all have insurance businesses, see to Prudential PLC. That deal went Reuterscial strength and its commitment terest payments of 6% or more, assets. Nan Shan offers them heft south when the British insurerto Nan Shan when they lowered the legacy of past heavy competi- and competitive advantage in a haggled on the price. AIG revertedthe ax. tion in the sector. With interest Nan Shan headquarters in Taipei mature domestic financial-ser- to taking AIA public, ultimately But non-Chinese foreign insur- rates low, many insurers make vices market. Moreover, acquiring lucking out in October.ers bidding for Nan Shan would less on their investments than Local firms like Ruentex are at- Nan Shan could also make it eas- AIG no doubt wants similarlybe welcomed with open arms. Tai- they pay out on their old policies, tracted by the ability to invest in ier for them to take on the main- happy resolution for Nan Shan,wanese officials, including the Fi- a phenomenon known as “nega- real estate through an insurer’s land Chinese insurance market, but with one or two fewer twistsnancial Supervisory Commission, tive spread.” portfolio, says Mr. Radwan, who where prospects are more attrac- along the way.
    • 24 THE WALL STREET JOURNAL. Monday, December 6, 2010 MARKETSEuro risks losses Volatility likely to remain high TWD Bond FUND SCORECARDfrom key Irish vote in Treasurys These funds invest in Taiwan Dollar-denominated bonds. The funds may also invest in Taiwan dollar- denominated money market securities. Ranked on % total return (dividends reinvested) in Euros for one year ending December 03, 2010 BY DEBORAH LYNN BLUMBERG Leading 10 PerformersBY KAREN JOHNSON the dissolution of Parliament and a FUND FUND LEGAL % Return in $US ** general election. Treasury market participants RATING * NAME FUND MGMT CO. CURR. BASE YTD 1-YR 2-YR 5-YR The euro is likely to come under That wouldn’t be good for the should brace themselves for volatile NS Union Union Securities TWDTWN 10.40 9.65 16.15 5.94more pressure this week as worries euro, as instability in Ireland would trading this week, and for the rest AdvantageGlblFixedIncPort Invest Trust Co., Ltdpersist about sovereign-debt woes, cast into doubt the country’s ability of December, as bonds continue to NS Fuh Hwa Fuh-Hwa Investment TWDTWN 7.82 8.29 NS NSwith a vote in Ireland in the spot- to fulfill the austerity conditions at- be buffeted by euro-zone debt con- Global Short-term Income Trust Co., Ltdlight. tached to the €67.5 billion ($90 bil- cerns and U.S. data in thin year-end NS Prudential Prudential TWDTWN 6.13 6.68 6.10 3.43 But the Federal Reserve’s “quan- lion) rescue package provided by trade. Financial Return Financial Sec Inv Trust Ent.titative easing” plans could temper the European Union and Interna- Volatility in the Treasury market NS Polaris Polaris Intl Secs TWDTWN 6.09 6.55 6.06 3.36the dollar’s gains and provide at tional Monetary Fund. The instabil- over the last several weeks has in- Fu-Li Strategic Inc Invmt Tr Co., Ltdleast a fleeting reprieve for the ity would likely also rattle investors creased amid concerns about the common European who fear that the aid package for fiscal health of mul- NS Mega Diamond Mega International TWDTWN 5.75 6.25 5.55 3.15CURRENCY currency. Ireland is but a Band-Aid for a deep U.S. CREDIT tiple euro-zone na- Bond Inv Trust Co., LtdMARKETS On Friday, the euro-zone wound. MARKETS tions and as pieces NS IBT Ta Chong IBT Asset TWDTWN 5.69 6.23 5.56 3.19 dollar extended its Besides the euro-zone troubles, of U.S. data have Bond management Co., Ltdlosses against the euro after CBS the market is likely to be affected been stronger than expected. NS IBT 1699 IBT Asset TWDTWN 5.68 6.22 5.55 3.14News reported that Federal Reserve this week by other sources of tur- Recent price swings in the Trea- Bond management Co., LtdChairman Ben Bernanke didn’t rule moil: political tensions on the Ko- surys market suggest the turbulence NS Bond Fund Union Securities TWDTWN 5.72 6.21 5.56 3.11out an expansion of the Fed’s asset- rean peninsula, the threat of further isn’t over, even though volatility did Invest Trust Co., Ltdpurchase program, though the tele- policy tightening in China and a calm a bit Friday after a weaker- NS Fuh Hwa You Fuh-Hwa Investment TWDTWN 5.71 6.20 5.56 3.16vision network didn’t offer addi- stumbling U.S. economy. than-expected employment report. Li Trust Co., Ltdtional context. On Friday, a sharply weaker- Last Wednesday, Treasurys saw On the other side of the coin, il- than-expected U.S. jobs report sig- the biggest one-day move since NS Jih Sun Bond Jih Sun Securities TWDTWN 5.68 6.18 5.52 3.06lustrating just how difficult the euro naled the U.S. economic recovery early June; the 10-year yield rose by Inv Trust Co., Ltdzone’s challenges might have re- might be in deeper trouble than 0.18 percentage point and the seven- NOTE: Changes in currency rates will affect performance and rankings. Source: Morningstar, Ltd KEY: ** 2YR and 5YR performance is annualized 1 Oliver’s Yard, 55-71 City Roadcently been, the U.K. Guardian many had realized. The disappoint- year yield by almost 0.19 percentage NA-not available due to incomplete data; London EC1Y 1HQ United Kingdom NS-fund not in existence for entire period; Email: mediaservice@morningstar.comnewspaper reported Friday that ing nonfarm-payrolls data cements point after cheerier global data that Phone: +44 (0)203 107 0038; Fax: +44 (0)203 107 0001German Chancellor Angela Merkel the case for the Fed to complete its spurred investors to shed low-riskthreatened in late October to pull $600 billion asset-purchase pro- bonds.her country out of the euro zone. gram, which has been weighing on “When you have those kind of the start of November, and from 75 posed budget could lead to political Euro-zone troubles will be in fo- the dollar, analysts said. Some ana- moves, it’s unlikely [volatility] will back in August. The index is down, instability and uncertainty aboutcus for much of the week, but par- lysts suggested that further policy come down,” said David Gottlieb, however, from a record high of whether the European Union/Inter-ticularly on Tuesday, as the Irish action may also be required. principal at investment adviser EMF 264.6, which it hit back in October national Monetary Fund rescueParliament votes on an austere 2011 The dollar slumped broadly Fri- Financial Products. 2008 after the collapse of Lehman package will still be offered.budget. With Irish Prime Minister day. Late in New York trading, the The main gauge of volatility in Brothers. The market this week also facesBrian Cowen holding only the slim- euro was at $1.3411 from $1.3224 the Treasurys market, Merrill A key event this week could auctions of three-, 10- and 30-yearmest majority, the vote could end in late Thursday. The dollar was at Lynch’s MOVE index, stood Friday at prove to be the Irish budget vote securities, which will total $66 bil-a vote of no confidence, resulting in 82.71 yen from 83.89 yen. 109. That is up from the low 80s at Tuesday. A failure to pass the pro- lion. Advertisement INTERNATIONAL INVESTMENT FUNDS [ Search by company, category or country at ] NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Income C OT OT LUX 12/02 EUR 6.81 8.2 8.6 20.7 Gl Bond AT OT OT LUX 12/02 USD 9.52 7.0 6.1 11.4 Gl Thematic Res. B GL EQ LUX 12/02 USD 14.82 15.0 15.0 46.1 Eur Income C OT OT LUX 12/02 USD 9.00 8.2 8.6 20.7 Gl Bond B OT OT LUX 12/02 USD 9.53 6.0 5.1 10.3 Gl Thematic Res. I GL EQ LUX 12/02 USD 19.20 16.9 17.0 48.8 Eur Income C2 OT OT LUX 12/02 EUR 13.89 8.3 8.6 20.7 Gl Bond B2 OT OT LUX 12/02 HKD 115.43 6.0 5.1 10.2 Gl Value A GL EQ LUX 12/02 USD 11.24 0.9 0.2 20.2 Eur Income C2 OT OT LUX 12/02 USD 18.36 8.3 8.6 20.7 Gl Bond B2 OT OT LUX 12/02 USD 14.86 6.0 5.1 10.2 Gl Value B GL EQ LUX 12/02 USD 10.23 -0.1 -0.8 19.0Data as shown is for information purposes only. No offer is being made by Eur Income I OT OT LUX 12/02 EUR 6.81 9.2 9.7 21.8 Gl Bond BT OT OT LUX 12/02 HKD 74.18 6.0 5.1 10.2 Gl Value C GL EQ LUX 12/02 USD 10.88 0.5 -0.3 19.6Morningstar, Ltd. or this publication. Funds shown aren’t registered with the Eur Income I OT OT LUX 12/02 USD 9.00 9.2 9.7 21.8 Gl Bond BT OT OT LUX 12/02 USD 9.55 6.0 5.1 10.2 Gl Value I GL EQ LUX 12/02 USD 12.04 1.6 1.0 21.1U.S. Securities and Exchange Commission and aren’t available for sale to United Eur Strat Value A EU EQ LUX 12/02 EUR 8.91 4.5 7.2 13.3 Gl Bond C OT OT LUX 12/02 USD 9.53 6.5 5.7 10.8 Greater China A AS EQ LUX 12/02 USD 44.73 11.7 10.9 38.2States citizens and/or residents except as noted. Prices are in local currencies. Eur Strat Value A EU EQ LUX 12/02 USD 11.77 4.5 7.2 13.3 Gl Bond C2 OT OT LUX 12/02 USD 14.79 6.5 5.6 10.8 Greater China B AS EQ LUX 12/02 USD 39.22 10.7 9.8 36.8All performance figures are calculated using the most recent prices available. Eur Strat Value I EU EQ LUX 12/02 EUR 9.19 5.1 8.0 14.3 Gl Bond I OT OT LUX 12/02 USD 9.53 7.4 6.7 11.9 Greater China C AS EQ LUX 12/02 USD 43.98 11.3 10.4 37.5 Eur Strat Value I EU EQ LUX 12/02 USD 12.14 5.1 8.0 14.3 Gl Conservative A US BA LUX 12/02 USD 15.26 4.7 4.2 12.4 India Growth A EA EQ LUX 12/02 USD 151.07 19.0 20.6 NS NAV —%RETURN— Eur Value A EU EQ LUX 12/02 EUR 9.65 4.9 7.7 15.5 Gl Conservative A2 US BA LUX 12/02 USD 17.72 4.7 4.2 12.4 India Growth AX EA EQ LUX 12/02 USD 132.41 19.4 21.0 57.1FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Eur Value A EU EQ LUX 12/02 USD 12.75 4.9 7.7 15.5 Gl Conservative B US BA LUX 12/02 USD 15.27 3.8 3.1 11.3 India Growth B EA EQ LUX 12/02 USD 156.81 17.9 19.4 NS Eur Value B EU EQ LUX 12/02 USD 11.63 4.0 6.7 14.3 Gl Conservative B2 US BA LUX 12/02 USD 16.68 3.7 3.2 11.2 India Growth BX EA EQ LUX 12/02 USD 112.14 18.3 19.8 55.5 Eur Value B EU EQ LUX 12/02 EUR 8.80 4.0 6.7 14.3 Gl Conservative C US BA LUX 12/02 USD 15.28 4.2 3.7 11.9 India Growth I EA EQ LUX 12/02 USD 137.85 19.9 21.6 57.8 Eur Value C EU EQ LUX 12/02 EUR 9.29 4.5 7.3 15.0 Gl Conservative C2 US BA LUX 12/02 USD 17.26 4.2 3.7 11.9 Intl Health Care A OT EQ LUX 12/02 USD 135.53 -1.4 -0.3 11.9 Eur Value C EU EQ LUX 12/02 USD 12.28 4.5 7.3 15.0 Gl Conservative I US BA LUX 12/02 USD 15.34 5.3 4.9 13.3 Intl Health Care B OT EQ LUX 12/02 USD 113.27 -2.3 -1.3 10.8 Eur Value I EU EQ LUX 12/02 USD 14.84 5.7 8.6 16.4 Gl Eq Blend A GL EQ LUX 12/02 USD 11.97 2.7 2.2 20.5 Intl Health Care C OT EQ LUX 12/02 USD 129.36 -1.8 -0.7 11.4 Eur Value I EU EQ LUX 12/02 EUR 11.23 5.7 8.6 16.4 Gl Eq Blend B GL EQ LUX 12/02 USD 11.13 1.6 1.2 19.4 Intl Health Care I OT EQ LUX 12/02 USD 149.17 -0.7 0.5 12.8 EuroZone Strat Val AX EU EQ LUX 12/02 USD 10.27 10.5 13.9 18.3 Gl Eq Blend C GL EQ LUX 12/02 USD 11.71 2.2 1.7 20.0 Intl Technology A OT EQ LUX 12/02 USD 127.47 15.5 20.5 37.2n AHW CAPITAL MANAGEMENT EuroZone Strat Val AX EU EQ LUX 12/02 EUR 7.77 10.5 13.9 18.3 Gl Eq Blend I GL EQ LUX 12/02 USD 12.72 3.4 3.0 21.5 Intl Technology B OT EQ LUX 12/02 USD 109.44 14.4 19.3 35.8Tel (+49) 1805 - 23 82 82 EuroZone Strat Val BX EU EQ LUX 12/02 EUR 6.92 9.5 12.7 17.1 Gl Growth A GL EQ LUX 12/02 USD 43.95 4.9 4.7 21.3 Intl Technology C OT EQ LUX 12/02 USD 122.67 15.0 20.0 EuroZone Strat Val BX EU EQ LUX 12/02 USD 9.14 9.5 12.7 17.1 Gl Growth B GL EQ LUX 12/02 USD 36.36 3.9 3.7 20.1 Intl Technology I OT EQ LUX 12/02 USD 143.97 16.3 21.5 38.3AHW Top-Div.Int. GL EQ LUX 12/01 EUR 50.64 -7.3 -3.9 3.4 EuroZone Strat Val CX EU EQ LUX 12/02 EUR 5.86 9.9 13.3 17.7 Gl Growth C GL EQ LUX 12/02 USD 42.00 4.5 4.2 20.7 Japan Eq Blend A JP EQ LUX 12/02 JPY 5869.00 -2.6 3.9 9.5 EuroZone Strat Val IX EU EQ LUX 12/02 USD 11.27 11.2 14.8 19.2 Gl Growth I GL EQ LUX 12/02 USD 49.17 5.7 5.6 22.3 Japan Eq Blend B JP EQ LUX 12/02 JPY 5611.00 -3.5 2.9 8.4 EuroZone Strat Val IX EU EQ LUX 12/02 EUR 8.53 11.2 14.8 19.2 Gl High Yield A OT OT LUX 12/02 USD 4.61 14.2 17.1 38.7 Japan Eq Blend C JP EQ LUX 12/02 JPY 5751.00 -3.0 3.5 9.0 Gl Balanced (Euro) A EU BA LUX 12/02 USD 16.12 NS NS NS Gl High Yield A2 OT OT LUX 12/02 HKD 82.10 14.1 17.1 38.8 Japan Growth A JP EQ LUX 12/02 JPY 5518.00 -6.1 -0.9 3.6 Gl Balanced (Euro) B EU BA LUX 12/02 USD 15.57 NS NS NS Gl High Yield A2 OT OT LUX 12/02 USD 10.57 14.1 17.1 38.8 Japan Growth B JP EQ LUX 12/02 JPY 5277.00 -6.9 -1.9 2.6 Gl Balanced (Euro) C EU BA LUX 12/02 USD 15.95 NS NS NS Gl High Yield AT OT OT LUX 12/02 USD 4.56 14.3 16.9 38.6 Japan Growth C JP EQ LUX 12/02 JPY 5409.00 -6.4 -1.3 3.2 Gl Balanced (Euro) I EU BA LUX 12/02 USD 16.52 NS NS NS Gl High Yield AT OT OT LUX 12/02 HKD 35.42 14.3 16.9 38.6 Japan Strat Value A JP EQ LUX 12/02 JPY 6224.00 1.7 9.3 15.7 Gl Balanced A US BA LUX 12/02 USD 17.25 4.7 4.0 17.3 Gl High Yield B OT OT LUX 12/02 USD 4.61 13.1 15.9 37.1 Japan Strat Value B JP EQ LUX 12/02 JPY 5960.00 0.8 8.3 14.6 Gl Balanced B US BA LUX 12/02 USD 16.25 3.7 3.0 16.2 Gl High Yield B2 OT OT LUX 12/02 HKD 130.80 13.2 15.9 37.3 Japan Strat Value C JP EQ LUX 12/02 JPY 6093.00 1.2 8.8 15.1n ALLIANCE BERNSTEIN Gl Balanced C US BA LUX 12/02 USD 16.95 4.4 3.8 17.0 Gl High Yield B2 OT OT LUX 12/02 USD 16.84 13.2 15.9 37.3 Real Estate Sec. A OT EQ LUX 12/02 USD 16.35 13.9 14.6 Tel. +800 2263 8637 Gl Balanced C US BA LUX 12/02 EUR 12.83 4.4 3.8 17.0 Gl High Yield BT OT OT LUX 12/02 HKD 36.04 13.1 15.8 37.5 Real Estate Sec. B OT EQ LUX 12/02 USD 14.81 12.9 13.4 32.2Am Eq Blend A US EQ LUX 12/02 USD 11.03 6.4 7.2 19.8 Gl Balanced I US BA LUX 12/02 USD 18.01 5.4 4.8 18.2 Gl High Yield BT OT OT LUX 12/02 USD 4.64 13.1 15.8 37.5 Real Estate Sec. I OT EQ LUX 12/02 USD 17.70 14.8 15.5 34.6Am Eq Blend B US EQ LUX 12/02 USD 10.27 5.3 6.1 18.7 Gl Bond A OT OT LUX 12/02 USD 9.53 6.9 6.2 11.3 Gl High Yield C OT OT LUX 12/02 USD 4.61 13.7 16.6 38.0 Short Mat Dollar A US BD LUX 12/02 USD 7.42 4.6 5.9 8.7Am Growth A US EQ LUX 12/02 USD 32.84 5.1 7.8 28.4 Gl Bond A2 OT OT LUX 12/02 HKD 132.98 6.9 6.1 11.3 Gl High Yield C2 OT OT LUX 12/02 USD 15.61 13.8 16.5 38.1 Short Mat Dollar A2 US BD LUX 12/02 USD 10.24 4.6 5.9 8.7Am Growth AX US EQ LUX 12/02 USD 35.64 5.7 8.4 29.1 Gl Bond A2 OT OT LUX 12/02 USD 17.12 6.9 6.1 11.3 Gl High Yield I OT OT LUX 12/02 USD 4.61 14.8 17.8 39.6 Short Mat Dollar AT US BD LUX 12/02 USD 7.41 4.7 5.9 8.8Am Growth B US EQ LUX 12/02 USD 27.36 4.2 6.7 27.1 Gl Bond AT OT OT LUX 12/02 HKD 73.95 7.0 6.1 11.4 Gl Thematic Res. A GL EQ LUX 12/02 USD 17.10 16.1 16.1 47.6 Short Mat Dollar B US BD LUX 12/02 USD 7.42 4.2 5.4 8.2Am Growth C US EQ LUX 12/02 USD 29.59 4.7 7.3 27.8 Short Mat Dollar B2 US BD LUX 12/02 USD 10.15 4.2 5.4 8.2Am Growth I US EQ LUX 12/02 USD 36.67 5.9 8.7 29.4 Short Mat Dollar BT US BD LUX 12/02 USD 7.42 4.2 5.4 7.9Am Income A OT OT LUX 12/02 USD 8.88 10.9 11.6 21.4 Short Mat Dollar C US BD LUX 12/02 USD 7.42 4.2 5.4 8.2 [ALTERNATIVE INVESTMENT FUNDS] AdvertisementAm Income A2 OT OT LUX 12/02 HKD 164.05 10.9 11.6 21.5 Short Mat Dollar C2 US BD LUX 12/02 USD 14.35 4.2 5.4 8.2Am Income A2 OT OT LUX 12/02 USD 21.12 10.9 11.6 21.5 Advertisement Short Mat Dollar I US BD LUX 12/02 USD 7.42 5.1 6.5 9.3Am Income AT OT OT LUX 12/02 HKD 68.82 10.9 11.6 21.5 US Thematic Portfolio A EUR H US EQ LUX 12/02 EUR 18.27 NS NS NSAm Income AT OT OT LUX 12/02 USD 8.86 10.9 11.6 21.5 US Thematic Portfolio B EUR H US EQ LUX 12/02 EUR 18.20 NS NS NSAm Income B OT OT LUX 12/02 USD 8.88 10.2 10.8 20.5 US Thematic Portfolio C EUR H US EQ LUX 12/02 EUR 18.24 NS NS NSAm Income B2 OT OT LUX 12/02 HKD 140.51 10.2 10.8 20.6 NAV —%RETURN— NAV —%RETURN— US Thematic Portfolio I EUR H US EQ LUX 12/02 EUR 18.33 NS NS NSAm Income B2 OT OT LUX 12/02 USD 18.09 10.2 10.8 20.6 FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR US Thematic Research A US EQ LUX 12/02 USD 10.18 19.3 20.0 26.5Am Income BT OT OT LUX 12/02 HKD 69.21 10.2 10.8 20.6 US Thematic Research B US EQ LUX 12/02 USD 9.28 18.2 18.8 25.2Am Income BT OT OT LUX 12/02 USD 8.91 10.2 10.8 20.6 n ALEXANDRA INVESTMENT MANAGEMENT Platinm-Gbl Dividend GL EQ CYM 10/29 USD 77.42 23.3 30.7 22.7 US Thematic Research I US EQ LUX 12/02 USD 11.03 20.2 20.9 27.5Am Income C OT OT LUX 12/02 USD 8.88 10.5 11.1 20.9 Platinm-Nordic OT OT CYM 09/30 SEK 629.75 2.4 4.0 6.8 Tel: +1 212 301 1800 Fax: +1 212 301 1810 Platinm-Premier OT OT CYM 08/29 USD 28.37 NS NS NSAm Income C2 OT OT LUX 12/02 USD 26.95 10.5 11.0 20.9 AlexandraConvertibleBondFundI,Ltd.(ClassA) OT OT VGB 08/31 USD 2174.86 28.6 51.1 47.6Am Income I OT OT LUX 12/02 USD 8.88 11.5 12.2 22.1 Platinm-Turnberry OT OT USA 10/29 USD 60.22 0.2 6.4 NSAm Value C US EQ LUX 12/02 USD 10.13 18.8 19.5 25.9Emg Mkts Debt A GL BD LUX 12/02 USD 16.58 12.7 13.3 33.0Emg Mkts Debt A2 GL BD LUX 12/02 USD 22.68 12.8 13.3 33.1Emg Mkts Debt AT GL BD LUX 12/02 USD 16.64 12.8 13.4 33.2Emg Mkts Debt B GL BD LUX 12/02 USD 16.58 11.8 12.2 31.7 n ALLIANZ GLOBAL INVESTORS KAPITALANLAGEGESELLSCHAFTEmg Mkts Debt B2 GL BD LUX 12/02 USD 21.64 11.8 12.2 31.8 Concentra AE EU EQ DEU 12/02 EUR 60.60 17.0 20.8 31.5Emg Mkts Debt BT GL BD LUX 12/02 USD 16.61 11.8 12.2 31.8 n CREDIT PACIFIC ASSET MANAGMENTEmg Mkts Debt C GL BD LUX 12/02 USD 16.58 12.3 12.8 32.4 n SUPERFUND ASSET MANAGEMENT GMBH Industria AE EU EQ DEU 12/02 EUR 74.40 5.1 8.3 20.9Emg Mkts Debt C2 GL BD LUX 12/02 USD 22.20 12.3 12.8 32.5 For info about open funds, contact and InternRent AE EU BD DEU 12/02 EUR 40.59 16.8 16.9 7.1 CPS-Master Priv Fund GL OT WSM 12/02 USD 121.57 21.6 23.6 21.4Emg Mkts Debt I GL BD LUX 12/02 USD 16.58 13.2 13.8 33.7 *Closed for New Investments n CHARTERED ASSET MANAGEMENT PTE LTD - TEL NO: 65-6835-8866Emg Mkts Growth A GL EQ LUX 12/02 USD 38.90 12.3 13.4 46.1 Superfund Cayman* GL OT CYM 11/30 USD 44.46 9.0 -10.9 -25.1Emg Mkts Growth B GL EQ LUX 12/02 USD 32.67 11.2 12.3 44.7 Superfund GCT USD* GL OT LUX 11/30 USD 2230.40 1.6 -12.5 -21.1 Fax No: 65-6835 8865, Website:, Email: CAM-GTF Limited OT OT MUS 11/26 USD 403362.32 46.9 63.0 88.5Emg Mkts Growth C GL EQ LUX 12/02 USD 33.58 11.8 12.9 45.5 Superfund Green Gold A (SPC) GL OT CYM 11/30 USD 1173.47 21.7 2.6 5.1Emg Mkts Growth I GL EQ LUX 12/02 USD 43.45 13.1 14.4 47.3 Superfund Green Gold B (SPC) GL OT CYM 11/30 USD 1110.78 18.7 -3.8 -4.4Eur Income A OT OT LUX 12/02 EUR 6.81 8.7 9.1 21.2 Superfund Q-AG* GL OT AUT 11/30 EUR 6838.00 3.3 -5.3 -10.9Eur Income A OT OT LUX 12/02 USD 9.00 8.7 9.1 21.2 n WINTON CAPITAL MANAGEMENT LTDEur Income A2 OT OT LUX 12/02 EUR 13.99 8.7 9.1 21.2 n PLATINUM CAPITAL MANAGEMENT Tel: +44 (0)20 7610 5350 Fax: +44 (0)20 7610 5301Eur Income A2 OT OT LUX 12/02 USD 18.49 8.7 9.1 21.2 Winton Evolution EUR Cls H GL OT CYM 09/30 EUR 1049.82 11.2 8.1 NSEur Income AT OT OT LUX 12/02 EUR 6.80 8.8 9.1 21.3 Tel: +44 207 024 9840, Platinm-All Star OT OT CYM 10/29 USD 100.29 3.2 5.5 5.6 Winton Evolution GBP Cls G GL OT CYM 09/30 GBP 1056.92 11.4 8.3 NSEur Income B OT OT LUX 12/02 EUR 6.81 8.0 8.4 20.4 Winton Evolution USD Cls F GL OT CYM 09/30 USD 1332.74 11.3 8.3 3.5Eur Income B OT OT LUX 12/02 USD 9.00 8.0 8.4 20.4 Platinm-All Weather OT OT USA 10/31 USD 129.92 NS NS NS n GAM FUND MANAGEMENT LIMITED Winton Futures EUR Cls C GL OT VGB 09/30 EUR 216.04 10.1 7.2 3.5Eur Income B2 OT OT LUX 12/02 EUR 12.93 8.0 8.4 20.4 Platinm-Dynasty OT OT USA 10/29 USD 116.28 0.2 7.2 4.8 Georges Court, 54-62 Townsend Street, Dublin 2, Ireland Winton Futures GBP Cls D GL OT VGB 09/30 GBP 223.85 10.3 7.5 3.9Eur Income B2 OT OT LUX 12/02 USD 17.09 8.0 8.4 20.4 Platinm-Emancipation OT OT USA 10/29 USD 106.31 14.2 13.6 11.4 Winton Futures JPY Cls E GL OT VGB 09/30 JPY 15277.71 11.4 8.6 3.4 Tel +353 1 609 3927 Fax +353 1 611 7941, Internet: www.gam.comEur Income BT OT OT LUX 12/02 EUR 6.80 8.0 8.4 20.5 Platinm-Equity Plus OT OT USA 05/29 USD 35.02 -18.2 -63.7 -45.6 Winton Futures USD Cls B GL OT VGB 09/30 USD 768.05 10.3 7.6 3.6 GAM Asia Eq Hdg JPY Op GL EQ VGB 11/30 JPY 13590.16 -12.5 -8.4 25.3 For information about listing your funds, please contact: Carson Wong tel: +852 2831-6481; email:
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 25 MARKETSBonds begin to flag, Nikkei ends week higherwhile stocks gain fans BY SHRI NAVARATNAM AND V. PHANI KUMAR Japanese shares edged higher bank was actually aggressively buy- ing up the debt. In Tokyo, the Nikkei Stock Aver- age rose 0.1% to 10178.32, finishing Lee Kun-hee’s son, Jay Lee, will ac- tively seek new growth engines,” said HI Investment & Securities ana- lyst Lee Sang-hun. Continued from page 19 stocks. After tiptoeing back into Friday, with the main index finish- the week up 1.4%, its fifth straight In Sydney, the S&P/ASX 200 roseweeks, according to EPFR Global. stock funds in October and Novem- ing the week up 1.4%, its fifth con- weekly gain. Olympus climbed 1.4% 0.4% for the day and 2.1% for week In the U.S., the flight from bond ber, investors have pulled money secutive weekly gain, while South and Nikon rose 1%. Fast Retailing to 4694.22. Building-materials com-funds was due to a stampede from out of stocks again in recent weeks, Korea’s Kospi also gained as Sam- bucked the market, falling 3%, after pany James Hardie Industries,municipal-bond funds, which lost according to ICI data. sung Electronics surged. domestic same-store sales at its which has a significant exposure tonearly $7.9 billion in just two weeks, Some of the recent shift of retail Overall, Asian markets were little Uniqlo casual-clothing chain the U.S. market, jumped 6.2% in theaccording to ICI data. money into bonds may be lasting, as changed. Optimism over moves to slumped 14.5% in November from a wake of strong U.S. housing data. This flight from munis may be a an aging population chooses what it shore up confi- year earlier. It was the fourth con- In Hong Kong’s Hang Seng Indexharbinger of what is to come if the thinks are safer assets than stocks. ASIAN-PACIFIC dence in Europe secutive monthly decline in sales. fell 0.6% to 23320.52, but ended upbond market finally cracks, suggests Household stock ownership is still STOCKS was countered by In Seoul, the Kospi added 0.4% to the week up 1.9%. Coal miners ex-Gregory Peters, global director of high relative to history. Pension caution ahead of 1957.26 to 1957.26, and was up 2.9% tended losses in the wake of Bei-fixed-income research at Morgan funds are shifting more money to U.S. payrolls data to be released for the week. Heavyweight Samsung jing’s order to freeze contract coalStanley. bonds to match long-term liabilities. later in the day. The U.S. jobs figure Electronics surged 4.1% to an all- prices next year as part of efforts to Muni funds are telling because Even if rates keep trickling turned out to be much weaker than time high following changes in its contain inflation. China’s indepen-they are magnets for mom-and-pop higher, corporate bonds could expected. top management and a bullish tech- dent power producers, which hadmoney, and they are particularly thrive, benefiting from economic Most regional markets opened industry outlook. The tech giant rallied Thursday on the news, gavesensitive to increases in interest growth and the clean balance sheets higher following Thursday’s decision promoted the chairman’s only son, up some of those gains on worriesrates. November’s surge in Treasury of many industrial companies. by the European Central Bank to Jay Y. Lee, to president and Chief Beijing may also cap electricity tar-yields helped trigger a 2% decline in Recent moves out of bonds likely continue to provide support to Executive Choi Gee-sung to vice iffs. China Shenhua Energymuni returns, according to Barclays have much to do with investors banks. chairman. Samsung also said it had dropped 3% and China Coal EnergyCapital indexes. cashing in profitable investments While ECB President Jean-Claude established a group strategic-plan- gave up 2.7%. Datang International Still, Mr. Peters and most bond- and avoiding big new trades that Trichet initially disappointed inves- ning office to take charge of devel- Power Generation dropped 1.3%,market observers are loath to de- could turn a good year into a bad tors by not announcing an increase oping new businesses. Huadian Power International lostclare that a mass exodus from bonds one. Despite the pain in November, in purchases of government bonds, “Investors hope the new genera- 1.8% and Huaneng Power Interna-is imminent. Treasury returns are still up nearly market participants said the central tion of Samsung leaders, including tional 0902 shed 1.6%. Three props could support bonds 7% this year, and high-yield bond re-for the next several months: Choppy turns are up nearly 14%.economic growth, worries about Eu-rope and the promise of as much as$900 billion in Treasury purchases “The inflection point is not upon us,” said James Camp, managing di- rector of fixed income at Eagle As- Yields on Japanese government bonds edge upby the Federal Reserve. set Management in St. Petersburg, TOKYO—Japa- 1.205%, and the 20-year yield pushing down U.S. Treasury yields. “With that combination, it’s go- Fla., who oversees $3.9 billion. BOND nese government- climbed 0.035 percentage point to But while Japanese yields remaining to be hard for bond yields to “People have been lulled into MARKETS bond yields edged 2.03%. vulnerable to any increases in U.S.move too far,” said Joseph Shatz, opening up their statements month up Friday as inves- Yields had been rising on signs yields, some analysts say investorsrates strategist at Bank of America after month and seeing bonds keep tors awaited the U.S. jobs report of improvement in the global econ- don’t have enough confidence in theMerrill Lynch. going up,” Mr. Camp said, “and that was released after the close. omy. Japanese economic outlook to ag- Meanwhile, investors are still mathematically we know that’s im- The benchmark 10-year yield Friday’s U.S. jobs report, how- gressively sell bonds and shiftcautious after a dismal decade for possible.” added 0.005 percentage point to ever, was far weaker than expected, money to riskier assets. [ Search by company, category or country at ] INTERNATIONAL INVESTMENT FUNDS Advertisement NAV —%RETURN— NAV —%RETURN— NAV —%RETURN— NAV —%RETURN—FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YRGAM Asia Equity Hedge US GL EQ VGB 11/30 USD 256.82 -11.5 -8.2 26.5 GAMStar-AsEqGBP Ord Ac OT OT IRL 12/01 GBP 1.75 11.8 17.8 35.9 Eq. MENA USD A OT OT LUX 12/02 USD 55.34 8.8 5.1 13.9GAM Asia Equity USD OT OT VGB 12/02 USD 713.22 9.1 10.6 42.7 GAMStar-AsEqUSD Ord Ac OT OT IRL 12/01 USD 14.49 8.0 10.8 39.3 Eq. US Rel Val A US EQ LUX 12/01 USD 22.03 6.9 8.8 26.1GAM Asia-Pacific Eq USD AS EQ VGB 11/30 USD 1318.04 2.7 8.1 17.4 GAMStar-AsPacEqEUR Acc AS EQ IRL 12/01 EUR 111.82 10.5 17.9 14.3 Money Market EURO A EU MM LUX 12/01 EUR 27.50 0.4 0.4 0.8GAM Com Glb Bal EUR Op US BA VGB 11/29 EUR 103.96 5.7 5.7 11.7 GAMStar-AsPacEqEUR Inc AS EQ IRL 12/01 EUR 107.42 10.6 18.0 14.4GAM Com Glb Bal USD Op US BA VGB 11/29 USD 135.04 5.7 5.7 11.7 GAMStar-ContEurEqEUR Ac EU EQ IRL 12/01 EUR 12.06 9.7 14.2 19.1GAM Comp Glb Eq EUR Op GL EQ VGB 11/29 EUR 109.55 7.1 7.9 16.4 GAMStar-EurpEqEUR Acc EU EQ IRL 12/01 EUR 191.31 4.5 8.3 15.2GAM Comp Glb Eq USD Op GL EQ VGB 11/29 USD 136.63 7.1 7.9 16.4 GAMStar-EurpEqEUR Inc EU EQ IRL 12/01 EUR 173.65 4.5 8.3 15.2GAM Comp Glb Gr EUR Op US BA VGB 11/29 EUR 96.00 5.3 5.7 12.0 GAMStar-EurpEqUSD Acc EU EQ IRL 12/01 USD 15.33 -4.1 -5.6 17.6 n MANULIFE ASSET MANAGEMENT TEL:(852)2108 1110GAM Comp Glb Gr USD Op US BA VGB 11/29 USD 133.79 5.3 5.7 12.0 GAMStar-EurpEqUSD Inc EU EQ IRL 12/01 USD 13.84 -4.1 -5.6 17.5 Internet: 47/F Manulife Plaza, Causeway Bay, Hong KongGAM CompAbsRT EUR Op OT OT VGB 09/30 EUR 141.71 9.1 0.1 -6.9 GAMStar-FrontierOppUSD Acc OT OT IRL 12/01 USD 6.09 10.9 12.7 11.0 American Growth US EQ LUX 12/02 USD 16.42 7.5 10.9 22.2GAM CompAbsRT SGD Op OT OT VGB 09/30 SGD 102.21 9.2 -0.1 -8.3 GAMStar-JpnEq EUR Acc JP EQ IRL 12/01 EUR 92.88 5.6 12.9 6.5 American Growth AA US EQ LUX 12/02 USD 0.94 7.2 10.7 21.9 n THE NATIONAL INVESTORGAM CompAbsRT USD Op OT OT VGB 09/30 USD 845.66 9.5 0.7 -7.0 GAMStar-JpnEq EUR Inc JP EQ IRL 12/01 EUR 92.68 5.6 12.9 6.5 Asian Equity OT OT LUX 12/02 USD 2.81 14.8 16.2 45.9 TNI Tower | Zayed 1st Street Khalidia| Web:www.tni.aeGAM Cptal Apprec Eq Inc US EQ VGB 11/30 USD 272.30 9.5 14.0 25.1 GAMStar-JpnEq JPY Acc JP EQ IRL 12/01 JPY 897.57 -2.6 5.0 6.7 Asian Equity AA OT OT LUX 12/02 USD 0.90 14.5 15.9 45.4 TNI Mena Real Estate Fund OT EQ BMU 11/25 USD 806.10 -16.1 -21.9 -9.7GAM Cross Trading Inc OT OT VGB 11/22 USD 483.02 3.7 3.4 NS GAMStar-JpnEq USD Acc JP EQ IRL 12/01 USD 11.17 0.5 4.8 7.6 Asian Sm Cap Equity AA OT OT LUX 12/02 USD 1.55 34.5 35.5 72.1 TNI MENA Special Sits Fund OT OT BMU 10/31 USD 1120.56 3.8 -1.7 8.1GAM Diversity CHF Op OT OT VGB 11/22 CHF 90.67 -3.9 -4.0 -0.8 GAMStar-World EqUSD Acc GL EQ IRL 12/01 USD 2221.16 0.1 -0.1 18.2 China Value A AS EQ LUX 12/02 USD 8.46 18.9 18.6 47.1 TNI MENA UCITS Fund OT OT IRL 11/25 USD 1060.18 NS NS NSGAM Diversity EUR Op OT OT VGB 11/22 EUR 623.88 -3.8 -4.0 -0.2GAM Diversity USD 2.5XL OT OT VGB 11/22 USD 69.87 -10.8 -11.2 -3.5 n HSBC Trinkaus Investment Managers SA China Value AA AS EQ LUX 12/02 USD 2.65 18.6 18.3 46.7 TNI UAE Blue Chip Fund OT OT ARE 11/25 AED 5.13 -3.8 -17.7 -3.1 E-Mail: Dragon Growth AS EQ LUX 12/02 USD 1.81 10.5 9.6 41.7GAM Diversity USD Op OT OT VGB 11/22 USD 659.10 -3.2 -3.4 NS Dragon Growth AA AS EQ LUX 12/02 HKD 8.81 10.5 9.6 41.6GAM Dvrsty II CHF Op OT OT VGB 11/22 CHF 95.11 -4.4 -4.7 NS Telephone: 352 - 47 18471 Prosperity Return Fund A JP BD LUX 11/29 JPY 9981.95 1.0 NS NS Emg Eastrn Europe A EU EQ LUX 12/02 USD 5.18 12.4 14.8 50.8GAM Dvrsty II EUR Op OT OT VGB 11/22 EUR 132.61 -4.4 -4.7 -0.9GAM Dvrsty II USD Op OT OT VGB 11/22 USD 201.87 -3.9 -4.2 NS Prosperity Return Fund B OT OT LUX 11/29 JPY 8868.08 -10.0 NS NS Emg Eastrn Europe AA EU EQ LUX 12/02 USD 2.22 12.3 14.6 50.6GAM DvrstyIII EUR Op OT OT VGB 11/22 EUR 110.36 -4.5 -4.7 -1.7 Prosperity Return Fund C OT OT LUX 11/29 USD 94.87 -1.3 NS NS European Growth EU EQ LUX 12/02 USD 9.15 0.5 -1.1 26.9GAM DvrstyIII USD Op OT OT VGB 11/22 USD 117.12 -4.0 -4.2 -1.4 Prosperity Return Fund D OT OT LUX 11/29 EUR 111.84 15.0 NS NS European Growth AA EU EQ LUX 12/02 USD 0.65 0.3 -1.4 26.6GAM Euro Eq Hdg EUR Op EU EQ VGB 12/01 EUR 235.22 7.5 10.8 9.6 Renaissance Hgh Grade Bd A JP BD LUX 11/29 JPY 10206.87 3.4 NS NS Global Contrarain AA GL EQ LUX 12/02 USD 1.14 28.9 29.6 65.6GAM Euro Eq Hdg USD Op EU EQ VGB 12/01 USD 217.94 7.2 10.4 11.2 Renaissance Hgh Grade Bd B OT OT LUX 11/29 JPY 9005.75 -8.4 NS NS Global Property AA OT EQ LUX 12/02 USD 0.76 13.8 16.2 40.4 n WEBSITE: WWW.VALUEPARTNERS.COM.HK, TEL: (852) 2880 9263, FAX: (852) 2564 8487GAM GAMCO US EQ VGB 11/30 USD 968.93 19.5 21.0 37.0 Renaissance Hgh Grade Bd C OT OT LUX 11/29 USD 95.73 0.5 NS NS Global Resources AA GL EQ LUX 12/02 USD 1.24 14.1 8.9 46.1 *formerly known as China ABH Shares FundGAM Gb EmMkts Hdg EUROp OT OT VGB 12/01 EUR 100.52 2.7 2.7 8.1 Renaissance Hgh Grade Bd D OT OT LUX 11/29 EUR 105.83 9.0 NS NS Healthcare AA OT EQ LUX 12/02 USD 0.97 3.0 5.6 14.8 Intel-Chin Mainlnd Foc AS EQ CYM 11/30 USD 37.73 26.4 28.7 60.8GAM Gb EmMkts Hdg USDOp OT OT VGB 12/01 USD 107.38 4.1 4.0 9.0 India Equity AA EA EQ LUX 12/02 USD 1.28 16.1 18.0 53.4 Intel-China Converg* AS EQ CYM 11/30 USD 142.13 24.6 26.5 60.3GAM Gbl Divers USD Inc. GL EQ VGB 11/30 USD 259.14 3.7 5.6 17.5 VP Classic - A AS EQ CYM 12/02 USD 228.83 22.7 22.6 59.6 International Growth GL EQ LUX 12/02 USD 3.08 1.1 1.0 16.5GAM Grtr China Eq Hdg Op GL EQ VGB 11/30 USD 238.21 -16.9 -14.2 36.4 VP CLassic - B AS EQ CYM 12/02 USD 106.16 22.1 22.0 58.8 International Growth AA GL EQ LUX 12/02 USD 0.72 0.9 0.8 16.3GAM Intrst Trend II US BD VGB 07/02 USD 107.02 13.7 40.0 1.8 VP High Dividend Stk OT OT CYM 11/29 USD 57.85 27.3 29.8 61.0 Japanese Growth JP EQ LUX 12/02 USD 2.87 4.2 4.6 13.1GAM Intrst Trend IncGAM Japan Eq Hdg EUR OpGAM Japan Eq Hdg USD OpGAM Japan Eq Hdg YEN OpenGAM Japan USD OT AS AS AS JP OT EQ EQ EQ EQ VGB VGB VGB VGB VGB 11/30 11/30 11/30 11/30 12/02 USD EUR USD JPY USD 309.92 121.81 123.14 8503.03 1135.12 23.2 4.4 0.9 1.2 2.9 23.8 12.0 9.0 9.3 7.9 37.3 8.0 7.7 7.7 12.9 LIST YOUR n J.P. MORGAN ASSET MANAGEMENT For additional fund prices, please visit Japanese Growth AA Latin America Equity AA Manulife GF Strategic Income Fund AA MGF Asia Value Dividend Equity Fund JP EQ LUX 12/02 USD GL EQ LUX 12/02 USD OT OT LUX 12/02 USD OT OT LUX 12/02 USD 0.74 1.42 1.08 1.34 2.7 11.0 9.9 18.3 3.1 10.4 NS 21.5 12.1 56.5 NS NSGAM Japan YEN JP EQ VGB 12/02 JPY 8766.26 -0.7 7.0 11.4 Russia Equity AA EE EQ LUX 12/02 USD 0.77 20.3 21.1 71.0 FUNDS Tel: +65 6882 1328GAM Money Mkt EuroOp EU MM VGB 12/01 EUR 51.19 0.8 0.8 0.5 JF ASEAN Eq (USD)A(acc) AS EQ LUX 12/02 USD 15.68 37.8 41.4 NS Taiwan Equity AA AS EQ LUX 12/02 USD 1.22 12.7 20.0 51.6GAM Money Mkt USD US MM VGB 12/01 USD 100.18 0.3 0.1 0.1 JF Asia Pac ex-Jap Eq(SGD)A(acc) AS EQ LUX 12/02 SGD 14.96 NS NS NS Turkey Equity AA OT OT LUX 12/02 USD 1.04 36.1 53.6 80.4 n YUKI INTERNATIONAL LIMITEDGAM Multi-Arb EUR Op OT OT VGB 11/22 EUR 98.27 -11.6 -13.3 -7.9 JF Asia Pac ex-Jp (USD)A(acc) AS EQ LUX 12/02 USD 20.24 11.5 12.8 51.0 U.S. Bond AA US BD LUX 12/02 USD 1.17 9.0 8.6 14.8 Tel +44-207-269 0203 www.yukifunds.comGAM Multi-China EUR Op OT OT VGB 11/22 EUR 166.81 -0.7 1.7 6.1 JF China (SGD)A(acc) AS EQ LUX 12/02 SGD 13.90 0.6 NS NS U.S. Sm Cap Equity AA US EQ LUX 12/02 USD 0.98 20.4 27.2 49.4GAM Multi-China USD Op OT OT VGB 11/22 USD 177.31 0.4 2.8 7.0 JF China (USD)A(dist) AS EQ LUX 12/02 USD 51.45 7.7 6.2 40.2 U.S. Special Opportunities US BD LUX 12/02 USD 1.00 27.1 37.9 55.6GAM Multi-Emer Mkts GBP OT OT VGB 11/22 GBP 135.07 2.7 3.8 12.9 JF Greater China (SGD)A(acc) AS EQ LUX 12/02 SGD 15.01 6.0 NS NS U.S. Tsy Inf-ProtSec AA OT OT LUX 12/02 USD 1.20 6.1 4.0 9.5 n YMR-N SeriesGAM Multi-Emer Mkts USD OT OT VGB 11/22 USD 670.45 3.0 3.9 13.1 JF Greater China (USD)A(dist) AS EQ LUX 12/02 USD 28.69 13.4 14.7 44.4 YMR-N Growth Fund JP EQ IRL 12/03 JPY 9216.00 -2.9 4.3 7.2GAM Multi-Eur EUR Op OT OT VGB 11/22 EUR 267.52 -0.5 -0.1 2.6 JF India (SGD)A(acc) EA EQ LUX 12/02 SGD 16.43 14.2 NS NS n PT CIPTADANA ASSET MANAGEMENT YMR-N Small Cap Fund JP EQ IRL 12/03 JPY 6499.00 -7.7 -4.7 5.3GAM Multi-Eur II EUR Op OT OT VGB 11/22 EUR 137.67 -0.5 -0.5 2.9 JF India (USD)A(acc) EA EQ LUX 12/02 USD 28.36 22.2 23.9 55.2GAM Multi-Eur II USD Op OT OT VGB 11/22 USD 112.78 -0.3 -0.4 2.8 JF Korea Equity (USD) A (acc) AS EQ LUX 12/02 USD 10.35 23.4 28.9 61.1 Tel: +62 21 25574 883 Fax: +62 21 25574 893 Website: n Yuki 77 SeriesGAM Multi-Eur USD Op OT OT VGB 11/22 USD 467.26 -0.1 0.2 2.5 JF Pacific Tech (USD) A (acc) OT EQ LUX 12/02 USD 16.04 6.9 12.6 34.7 Indonesian Grth Fund GL EQ BMU 12/01 USD 176.94 38.9 43.6 95.6 Yuki 77 General JP EQ IRL 12/03 JPY 5680.00 -8.0 -2.6 2.2GAM Multi-Nth Am EUR Special OT OT VGB 11/22 EUR 133.99 0.0 0.8 NS JF Singapore (SGD)A(acc) AS EQ LUX 12/02 SGD 16.12 12.0 NS NS Yuki 77 Growth JP EQ IRL 04/27 JPY 5230.34 -7.3 -5.4 -27.3GAM Multi-Nth Am USD Special OT OT VGB 11/22 USD 218.52 0.2 0.9 7.5 JF Singapore (USD)A(dist) AS EQ LUX 12/02 USD 32.89 20.0 22.8 60.1GAM Multi-Pac EUR Op OT OT VGB 09/30 EUR 138.69 -3.3 -1.4 0.5 JPM Africa (USD) A (acc) OT OT LUX 12/02 USD 11.19 30.0 29.4 56.0 n Yuki Chugoku Series In print & online. Contact:GAM Multi-Pac USD Op OT OT VGB 09/30 USD 161.14 -2.6 -0.8 1.1 JPM Asia Pac Bond (USD)A(acc) AS BD LUX 12/02 USD 10.67 NS NS NS Yuki Chugoku Jpn Gen JP EQ IRL 12/03 JPY 6615.00 -3.4 3.3 6.5GAM Portable Dvr/S&P500 OT OT VGB 08/24 USD 70.11 17.7 -27.7 -22.9 JPM Brazil Alpha+ (USD)A(acc) OT OT LUX 12/02 USD 11.95 11.9 11.0 63.9 Yuki Chugoku JpnLowP JP EQ IRL 12/03 JPY 7627.00 0.6 4.8 0.9GAM Selection Hdg US EQ VGB 11/26 USD 3104.23 17.7 23.8 45.7 JPM Brazil Alpha+(SGD)A(acc) OT OT LUX 12/02 SGD 14.98 NS NS NSGAM Sing/Malaysia EA EQ VGB 12/02 USD 2890.63 14.5 16.0 36.5 JPM East Eur (EUR)A(dist)(JF) EU EQ LUX 12/02 EUR 34.67 33.0 43.1 64.1 n Yuki Hokuyo Japan SeriesGAM Sterling Spe Bd Inc OT OT VGB 11/30 GBP 260.10 13.1 14.1 26.2 JPM Emerg EMEA (USD) A (dist) GL EQ LUX 12/02 USD 62.26 21.6 25.1 58.6 n SENSIBLE ASSET MANAGEMENT LIMITED Yuki Hokuyo Jpn Gen Yuki Hokuyo Jpn Inc JP JP EQ IRL 12/03 JPY EQ IRL 12/03 JPY 4281.00 4888.00 -8.6 -7.1 -1.5 -2.1 0.6 -1.0GAM Trading EUR Inc OT OT VGB 10/29 EUR 340.86 4.8 4.6 6.2 JPM Emerg Mid East Eq(SGD)A(acc) OT OT LUX 12/02 SGD 14.85 NS NS NS Tel: (852) 2868 6848 Fax: (852) 2810 9948GAM Trading USD Inc OT OT VGB 11/22 USD 1010.35 3.8 3.5 5.1 JPM Emerg Mid East(USD)A(dist) OT OT LUX 12/02 USD 25.12 24.7 32.2 36.2 Asia Value Formula Fd-B OT OT CYM 12/02 USD 10.19 27.1 29.2 64.6 Yuki Hokuyo Jpn Sm Cap JP EQ IRL 12/03 JPY 4711.00 -8.1 -5.2 4.6GAM Trdg II IncEUR Op OT OT VGB 11/22 EUR 143.99 3.5 3.2 4.8 JPM Emerg Mkt Eq (SGD)A(acc) GL EQ LUX 12/02 SGD 15.23 7.0 NS NSGAM Trdg II IncUSD Op OT OT VGB 11/22 USD 328.17 3.9 3.6 5.1 JPM Emerg Mkt Eq (USD)A(dist) GL EQ LUX 12/02 USD 32.58 14.5 15.9 49.8 n SGAM FUND n Yuki Mizuho SeriesGAM Trdg IV IncEUR Op OT OT VGB 11/22 EUR 151.59 3.3 3.0 4.5 JPM Emerg Mkt Infra(USD)A(acc) OT OT LUX 12/02 USD 8.74 17.6 20.9 54.7 Yuki Mizuho Gen Jpn III JP EQ IRL 12/03 JPY 4031.00 -9.0 -1.7 0.6 AMUNDI HONG KONG LIMITED Yuki Mizuho Jpn Dyn Gro JP EQ IRL 12/03 JPY 4277.00 -8.7 -2.1 0.1GAM Trdg IV IncUSD Op OT OT VGB 11/22 USD 160.35 3.8 3.5 4.9 JPM Emerg Mkt LC Debt(USD)A(mth) OT OT LUX 12/02 USD 15.91 12.9 11.0 NS Hotline in Hong Kong (852) 2521 4231 Yuki Mizuho Jpn Exc 100 JP EQ IRL 12/03 JPY 6322.00 -9.5 -2.0 5.6GAM Trdg V IncEUR Op OT OT VGB 11/22 EUR 128.21 3.0 2.6 4.3 JPM Glb Dyn (SGD)A(acc) GL EQ LUX 12/02 SGD 14.43 1.5 NS NSGAM Trdg V IncUSD Op OT OT VGB 11/22 USD 134.21 3.6 3.2 4.8 JPM Glb Dyn (USD)A(dist) GL EQ LUX 12/02 USD 12.99 8.7 9.3 24.4 Yuki Mizuho Jpn Gen JP EQ IRL 12/03 JPY 8383.00 -3.0 4.4 6.3 Bonds US OppsCoreplus A US BD LUX 12/01 USD 40.13 8.8 7.8 14.3 Yuki Mizuho Jpn Gro JP EQ IRL 12/03 JPY 6136.00 -3.9 1.2 3.2GAM TrdgIII IncEUR Op OT OT VGB 11/22 EUR 161.90 3.1 2.9 4.4 JPM Glb Nat Res (EUR)A(dist) GL EQ LUX 12/02 EUR 21.67 42.8 41.5 77.1 Bonds World A OT OT LUX 12/01 USD 43.14 2.7 -3.2 7.2 Yuki Mizuho Jpn Inc JP EQ IRL 12/03 JPY 7273.00 -5.0 0.9 -0.8GAM TrdgIII IncUSD Op OT OT VGB 11/22 USD 168.66 3.8 3.5 4.9 JPM Glb Nat Res (SGD)A(acc) GL EQ LUX 12/02 SGD 25.76 22.3 NS NS Eq. AsiaPac Dual Strategies A AS EQ LUX 12/02 USD 11.48 10.2 11.0 41.2 Yuki Mizuho Jpn Lg Cap JP EQ IRL 12/03 JPY 4888.00 -6.1 1.2 2.5GAM USDSpecBondInc OT OT VGB 11/30 USD 623.76 17.7 20.8 43.5 JPM Glb Nat Res (USD)A(acc) GL EQ LUX 12/02 USD 20.29 30.9 23.6 80.0 Eq. China A AS EQ LUX 12/02 USD 24.96 3.4 1.6 37.5 Yuki Mizuho Jpn LowP JP EQ IRL 12/03 JPY 11018.00 -5.3 0.5 3.0GAM Worldwide GL EQ VGB 12/01 USD 2219.85 -0.2 -0.5 17.5 JPM Latin Amer (USD)A(dist)JF GL EQ LUX 12/02 USD 46.41 16.2 14.6 64.7 Eq. Global Energy A OT EQ LUX 12/01 USD 17.84 -1.6 -1.9 15.9 Yuki Mizuho Jpn PGth JP EQ IRL 12/03 JPY 7193.00 -9.9 -4.9 0.8GAMut Investments OT OT VGB 11/30 USD 8056.03 6.3 5.6 6.1 JPM Russia (USD) A (dist) EE EQ LUX 12/02 USD 15.27 18.9 20.8 75.8 Eq. Global Resources A GL EQ LUX 12/01 USD 125.65 15.1 10.1 47.8 Yuki Mizuho Jpn SmCp JP EQ IRL 12/03 JPY 6592.00 -7.9 -4.9 7.6 n JP MORGAN ASSET MGMT Eq. Gold Mines A OT EQ LUX 12/01 USD 40.11 32.4 18.1 62.3n GAM Star Fund Plc Brokerline 0800 727770 Clients 0800 204020 Yuki Mizuho Jpn Val Sel AS EQ IRL 12/03 JPY 5463.00 -3.5 1.5 7.6GAMStar China EqUSD (SCHUA) AS EQ IRL 12/01 USD 20.74 17.9 20.1 62.8 Eq. India A EA EQ LUX 12/02 USD 152.14 16.4 17.8 53.1 Yuki Mizuho Jpn YoungCo AS EQ IRL 12/03 JPY 2338.00 -14.6 -12.7 0.5 JF ASEAN Eq (SGD)A(acc) AS EQ LUX 12/02 SGD 15.65 NS NS NS Eq. Luxury & Lifestyle EURO A OT EQ LUX 12/01 EUR 94.50 33.1 33.5 52.2GAMStar US All CapEqUSD (SACU) US EQ IRL 12/01 USD 8.99 8.5 12.0 26.9 JPM Emerg EMEA (SGD)A(acc) GL EQ LUX 12/02 SGD 15.04 NS NS NSGAMStar-AsEqCHF Ord Ac OT OT IRL 12/01 CHF 11.53 4.4 11.0 25.9 Eq. Luxury & Lifestyle USD A OT EQ LUX 12/01 USD 123.45 33.1 33.5 52.2 n Yuki Shizuoka Japan Series JPM Latin Amer Eq(SGD)A(acc) GL EQ LUX 12/02 SGD 15.31 NS NS NS Eq. MENA EURO A OT OT LUX 12/02 EUR 41.96 8.8 5.1 13.9 Yuki Shizuoka General Japan JP EQ IRL 12/03 JPY 4498.00 -17.0 -10.6 -2.2GAMStar-AsEqEUR Ord Ac OT OT IRL 12/01 EUR 14.01 17.6 27.0 36.3 For information about listing your funds, please contact: Carson Wong tel: +852 2831-6481; email:
    • 26 THE WALL STREET JOURNAL. Monday, December 6, 2010 BLUE CHIPS BONDS Dow Jones Asia Titans: Fridays best and worst...Major players Market value, in billions Previous close, in STOCK PERFORMANCEbenchmarksAt right, a look at the Asia Titans, the biggest and best known Company Samsung Electronics Country South Korea Industry Semiconductors of US$ $100.9 local currency 894,000 Previous session 4.07% 52-week 17.8% Three-year 58.0% Hon Hai Precision Ind Taiwan Electrical Cmpnts Eqpmnt 35.5 112.50 3.21 -9.0 -37.0companies in Asia. Below, some of the Dow Jones Titans indexes ofbiggest and most liquid stocks in individual countries and regions Taiwan Smcndtr Mfg Taiwan Semiconductors 58.5 68.30 3.17 11.1 14.2 QBE Insurance Group Australia Reinsurance 17.9 17.50 2.40 -22.4 -44.7Giants around the world In U.S.-dollar terms. Rio Tinto Ltd. Australia General Mining 51.8 86.42 1.66 17.6 -41.2Dow Jones Country Titans INDEX PERFORMANCE China Construction Bank Hong Kong Banks $219.9 7.10 -1.53% 1.7 -2.0 Previous session Year-to-date 52-week China Life Insurance Hong Kong Life Insurance 31.9 33.30 -1.33 -16.6 -22.3Turkey 0.02% 25.0% 31.6% Bank of China Hong Kong Banks 45.6 4.23 -2.6 8.9 -1.17Sweden 0.44 23.0 20.8 Indl Comm Bk China Hong Kong Banks 66.9 5.98 -0.99 -9.7 -0.2Russia 2.17 19.2 21.7 KDDI Japan Mobile Telecomms 25.8 484,000 -0.92 -1.4 -36.7South Korea 0.78 14.7 19.3South Africa 0.83 12.9 15.2Germany -0.11 12.5 15.0 ...And the rest of Asias blue chipsSingapore -0.87 11.1 15.2 Latest, Latest,Hong Kong -0.89 9.3 5.8 Market value, in local STOCK PERFORMANCE Market value, in local STOCK PERFORMANCE Company/Country (Industry) in billions (U.S) currency Latest 52-week Three-year Company/Country (Industry) in billions (U.S) currency Latest 52-week Three-yearCanada -0.06 8.6 10.2 Canon 61.2 4,110 1.48% 16.4% -28.6% National Australia Bk 50.1 23.93 0.08% -16.6% -38.3%U.K. -0.39 4.4 6.0 Japan (Electronic Office Equipment) Australia (Banks) CNOOC 102.1 17.74 1.14 43.8 26.4 Woolworths 32.4 26.67 0.08 -4.5 -20.1Netherlands 0.26 3.8 6.2 Hong Kong (Exploration Production) Australia (Food Retailers Wholesalers)Brazil 0.52 1.2 0.2 Westfield Grp 28.1 12.35 0.82 3.4 -41.1 Mitsubishi 42.9 2,163 0.05 1.8 -31.3 Australia (Retail) Japan (Industrial Suppliers)Switzerland -0.48 0.1 0.9 Japan Tobacco 33.8 291,800 0.76 3.4 -54.5 NTT DoCoMo 68.7 136,300 ... 1.5 -24.3 Japan (Tobacco) Japan (Mobile Telecommunications)Japan 0.21 -3.6% -1.1 POSCO 31.8 469,000 0.75 -19.4 -19.7 Mizuho Financial Grp 31.4 135.00 ... -19.6 -100.0Australia 0.30 -4.3 -1.5 South Korea (Steel) Japan (Banks) Sumitomo Mitsui Finl 44.3 2,629 0.73 -9.7 -99.7 Cheung Kong 34.8 116.60 ... 15.1 -22.3France 0.03 -5.5 -3.4 Japan (Banks) Hong Kong (Real Estate Holding Development) Honda Motor 69.6 3,155 0.64 5.7 -15.4 Westpac Bking 63.0 21.93 -0.14 -10.3 -22.2Italy 0.27 -11.8 -10.5 Japan (Automobiles) Australia (Banks)Spain 0.73 -12.4 -12.6 BHP Billiton 147.7 44.59 0.59 5.0 3.2 Panasonic 30.1 1,205 -0.17 -1.5 -46.8 Australia (General Mining) Japan (Consumer Electronics)China 88 0.26 -18.0 -19.5 Mitsui 29.3 1,341 0.52 6.8 -45.8 China Mobile (HK) 199.7 77.95 -0.32 5.4 -44.6 Japan (Industrial Suppliers) Hong Kong (Mobile Telecommunications) Tokio Marine Hldgs 22.8 2,395 0.42 -9.6 -38.4 Shinhan Financial Grp 18.7 44,750 -0.33 -5.5 -9.1 Japan (Property Casualty Insurance) South Korea (Banks)Dow Jones Regional Sector Titans Nintendo 36.2 23,450 0.39 14.4 -65.4 Nissan Motor 40.4 822.00 -0.36 16.4 -34.6 Japan (Toys) Japan (Automobiles) Sun Hung Kai Prop 43.2 130.80 0.38 10.4 -19.4 PetroChina 27.0 9.93 -0.40 0.2 -33.7Auto Parts 1.73% 33.1% 34.4% Hong Kong (Real Estate Holding Development) Hong Kong (Integrated Oil Gas)Travel Leisure 0.64 30.5 29.5 Woodside Petroleum 32.4 42.21 0.38 -14.5 -12.1 Toyota Motor 124.5 3,275 -0.46 -12.9 -47.1 Australia (Exploration Production) Japan (Automobiles)Chemicals 1.14 18.0 17.5 Reliance Industries 73.5 44.95 0.38 -6.4 -40.0 Aus NZ Bk 58.9 23.31 -0.47 5.0 -16.3 India (Exploration Production) Australia (Banks)Ind Gds Svcs 0.63 17.8 17.3 Nippon Steel 21.4 282.00 0.36 -19.2 -58.1 Nippon T&T 60.4 3,780 -0.53 -1.8 -99.2Media 0.78 14.4 16.9 Japan (Steel) Japan (Fixed Line Telecommunications) Kansai Elec Power 22.0 2,019 0.30 -7.0 -29.4 JFE Hldgs 17.1 2,673 -0.60 -15.4 -56.0Real Estate 0.58 14.3 13.8 Japan (Electricity) Japan (Steel)Arab 50 0.53 9.7 12.2 Commonwlth Bk of Aus 74.9 49.43 0.26 -8.6 -17.1 Sony 36.3 3,020 -0.66 22.0 -49.3 Australia (Banks) Japan (Consumer Electronics)Tiger 50* 0.64 9.0 8.9 Takeda Pharm 37.3 3,910 0.26 6.0 -43.1 Seven I Hldgs 22.4 2,104 -0.71 3.1 -25.8 Japan (Pharmaceuticals) Japan (Broadline Retailers)Asian 50 1.53 4.5 3.9 Tokyo Elec Power 37.3 1,959 0.26 -15.7 -35.6 Shin-Etsu Chml 21.4 4,180 -0.71 -15.9 -35.0Global 50 0.62 -1.1% -2.2 Japan (Electricity) Japan (Specialty Chemicals) Mitsubishi UFJ Finl 67.5 402.00 0.25 -19.1 -64.0 East Japan Railway 24.3 5,090 -0.78 -18.2 -99.4*Asia excluding Japan Japan (Banks) Japan (Travel Tourism) Source: Dow Jones Indexes Sources: Dow Jones Indexes; WSJ Market Data Group Credit derivativesTracking Spreads on credit derivatives are one way the market rates Credit-default swaps: Asian companies At its most basic, the pricing of credit-default swaps measures how much a buyer has to pay to purchase-andcredit creditworthiness. Regions that are treading in rough waters can see how much a seller demands to sell-protection from default on an issuers debt. The snapshot below gives a spreads swing toward the maximum—and vice versa. Indexes below sense which way the market was moving yesterday. are for five-year Markit iTraxx Indexes Index: series/version Europe: 14/1 Mid-spread, in pct. pts. Mid-price Coupon SPREAD RANGE, in pct. pts. since most recent roll Maximum Minimum Average Showing the biggest improvement... CHANGE, in basis points And the most deterioration CHANGE, in basis pointsdealmakers 1.07 99.66% 0.01% 1.20 0.95 1.04 Yesterday Yesterday Five-day 28-day Yesterday Yesterday Five-day 28-day Eur. High Volatility: 14/1 1.65 97.04 0.01 1.84 1.45 1.60 Telekom Malaysia BHD 83 –5 6 16 Fubon Finl Hldg 73 ... 5 4 Europe Crossover: 14/1 4.77 100.92 0.05 5.37 4.24 4.76 Malayan Bkg BHD 88 –4 6 19 Honda Mtr 42 ... 3 –2 Asia ex-Japan IG: 14/1 1.13 99.38 0.01 1.25 0.93 1.09 Nippon Sheet Glass 148 –4 ... –20 MARUI GROUP 117 1 1 –29 Japan: 14/1 0.97 100.13 0.01 1.10 0.90 1.00 MISC BHD 85 –4 3 17 Kowloon Canton Rwy 49 1 3 8 Note: Data as of December 2 Rep Philippines 135 –4 2 9 Woori Bk 149 1 13 33 In percentage points Tenaga Nasional BHD 85 –3 7 18 HYUNDAI Mtr 129 1 14 31 Spreads — NOTICE TO READERS — Index roll 3.20 Kdom Thailand 107 –3 5 20 SK Telecom 96 1 12 28 Spreads on five- Europe Genting Bhd –3 Wharf Hldgs 1All statistics published in 94 5 17 123 13 18 year swaps for Sub Financials 2.40 Korea Expwy –3 Shin Han Bk 2The Wall Street Journal t 109 10 34 146 16 35 corporate debt; ACOM –3 Samsung Electrs 3Asia from markets outside 1.60 471 –2 –113 85 11 30 based on Markitthe Asian-Pacific region Source: Markit Group iTraxx indexes. 0.80reflect preliminary data. t Europe 0 Behind Asias deals: Bank revenue rankings, Global June July Aug. Sept. Oct. Nov. 2010 Behind every IPO, bond offering, merger deal or syndicated loan is one or more investment banks. Here are Source: Markit Group investment banks ranked by year-to-date revenues from recent deals. PERCENTAGE OF TOTAL REVENUE Revenue, Market Equity Debt Mergers & in millions share capital markets capital markets acquisitions Loans JPMorgan $4,686 7.7% 29% 32% 24% 16% Bank of America Merrill Lynch 4,300 7.0 25 34 18 24 Goldman Sachs 3,723 6.1 33 24 37 7 Morgan Stanley Deutsche Bank 3,507 3,256 5.7 5.3 36 28 28 34 30 25 6 13 Follow the markets throughout the day, with updated stock Credit Suisse 3,214 5.3 25 34 28 13 quotes, news and commentary at Citi 2,684 4.4 29 38 22 11 UBS 2,426 4.0 33 32 30 6 Also, receive emails that summarize the day’s trading in Eu- Barclays Capital 2,387 3.9 19 42 21 17 rope and Asia. To sign up, go to Source: Dealogic
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 27 GLOBAL MARKETS LINEUPCommodities Prices of futures contracts with the most open interest Currencies London close on Dec. 3EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; NYBOT: New York Board of Trade; MDEX: Bursa Malaysia Per In Per InDerivatives Berhad; LIFFE: London International Financial Futures Exchange; LME: London Mercantile Exchange; NYMEX: New York Mercantile Exchange; AMERICAS Per euro In euros U.S. dollar U.S. dollars EUROPE Per euro In euros U.S. dollar U.S. dollarsICE: IntercontinentalExchange Argentina peso-a 5.3226 0.1879 3.9770 0.2514 Euro zone euro 1 1 0.7472 1.3384 ONE-DAY CHANGE Contract Contract Commodity Exchange Last price Net Percentage high low Brazil real 2.2614 0.4422 1.6897 0.5918 1-mo. forward 1.0002 0.9998 0.7473 1.3381 Corn (cents/bu.) CBOT 573.50 18.00 617.50 356.75 Canada dollar 1.3420 0.7452 1.0027 0.9973 3-mos. forward 1.0007 0.9993 0.7477 1.3375 3.24% 1-mo. forward 1.3428 0.7447 1.0034 0.9967 6-mos. forward 1.0015 0.9985 0.7483 1.3364 Soybeans (cents/bu.) CBOT 1300.25 20.50 1.60 1,348.50 872.75 3-mos. forward 1.3448 0.7436 1.0048 0.9952 Czech Rep. koruna-b 25.065 0.0399 18.728 0.0534 Wheat (cents/bu.) CBOT 779.00 30.50 4.07 864.25 504.75 6-mos. forward 1.3481 0.7418 1.0073 0.9928 Denmark krone 7.4523 0.1342 5.5683 0.1796 Live cattle (cents/lb.) CME 106.375 -0.100 -0.09% 106.950 88.750 Chile peso 643.81 0.001553 481.05 0.002079 Hungary forint 277.60 0.003602 207.42 0.004821 Cocoa ($/ton) ICE-US 2,935 67 2.34 3,477 2,410 Colombia peso 2535.30 0.0003944 1894.35 0.0005279 Norway krone 8.0076 0.1249 5.9832 0.1671 Coffee (cents/lb.) ICE-US 204.80 1.10 0.54 221.45 131.40 Ecuador US dollar-f 1.3384 0.7472 1 1 Poland zloty 3.9878 0.2508 2.9797 0.3356 Sugar (cents/lb.) ICE-US 29.50 1.05 3.69 33.39 11.90 Mexico peso-a 16.5432 0.0604 12.3609 0.0809 Russia ruble-d 41.819 0.02391 31.247 0.03200 Cotton (cents/lb.) ICE-US 132.34 6.00 4.75 151.95 61.89 Peru sol 3.7828 0.2644 2.8265 0.3538 Sweden krona 9.1224 0.1096 6.8162 0.1467 Crude palm oil (ringgit/ton) MDEX 3,516.00 16 0.46 3,540 2,533 Uruguay peso-e 26.566 0.0376 19.850 0.0504 Switzerland franc 1.3067 0.7653 0.9764 1.0242 Cocoa (pounds/ton) LIFFE 1,959 36 1.87 2,322 1,610 U.S. dollar 1.3384 0.7472 1 1 1-mo. forward 1.3063 0.7655 0.9760 1.0246 Robusta coffee ($/ton) LIFFE 1,864 16 0.87 2,084 1,374 Venezuela bolivar 5.75 0.173981 4.29 0.232848 3-mos. forward 1.3055 0.7660 0.9755 1.0251 Copper (cents/lb.) COMEX 399.90 2.00 0.50 408.75 230.00 ASIA-PACIFIC 6-mos. forward 1.3041 0.7668 0.9744 1.0263 Gold ($/troy oz.) COMEX 1406.20 16.90 1.22 1,426.10 897.30 Australia dollar 1.3541 0.7385 1.0117 0.9884 Turkey lira 1.9757 0.5061 1.4763 0.6774 Silver (cents/troy oz.) COMEX 2927.10 69.90 2.45 2,940.50 1,475.00 China yuan 8.9171 0.1121 6.6628 0.1501 U.K. pound 0.8514 1.1746 0.6361 1.5720 Aluminum ($/ton) LME 2,336.00 -14.00 -0.60 2,481.50 1,857.00 Hong Kong dollar 10.3880 0.0963 7.7618 0.1288 1-mo. forward 0.8515 1.1743 0.6363 1.5717 Tin ($/ton) LME 25,350.00 -50.00 -0.20 27,325.00 14,950.00 India rupee 60.1287 0.0166 44.9275 0.0223 3-mos. forward 0.8520 1.1738 0.6366 1.5709 Copper ($/ton) LME 8,706.00 36.00 8,920.00 6,120.00 Indonesia rupiah 12069 0.0000829 9018 0.0001109 6-mos. forward 0.8527 1.1727 0.6371 1.5695 0.42 Japan yen 110.62 0.009040 82.66 0.012098 MIDDLE EAST/AFRICA Lead ($/ton) LME 2,350.00 37.00 1.60 2,616.00 1,580.00 1-mo. forward 110.58 0.009043 82.63 0.012103 Bahrain dinar 0.5046 1.9819 0.3770 2.6524 Zinc ($/ton) LME 2,210.00 3.00 0.14 2,659.00 1,617.00 3-mos. forward 110.51 0.009049 82.57 0.012111 Egypt pound-a 7.7450 0.1291 5.7870 0.1728 Nickel ($/ton) LME 23,550 -150 -0.63 27,590 15,910 6-mos. forward 110.34 0.009063 82.45 0.012129 Israel shekel 4.8462 0.2063 3.6210 0.2762 Crude oil ($/bbl.) NYMEX 89.19 1.19 1.35 93.29 69.08 Malaysia ringgit-c 4.2131 0.2374 3.1480 0.3177 Jordan dinar 0.9472 1.0557 0.7078 1.4129 Heating oil ($/gal.) NYMEX 2.4874 0.0328 1.34 2.5235 1.5200 New Zealand dollar 1.7534 0.5703 1.3101 0.7633 Kuwait dinar 0.3767 2.6545 0.2815 3.5527 RBOB gasoline ($/gal.) NYMEX 2.3521 -0.0032 -0.14 2.3616 1.8222 Pakistan rupee 114.897 0.0087 85.850 0.0116 Lebanon pound 2009.53 0.0004976 1501.50 0.0006660 Natural gas ($/mmBtu) NYMEX 4.349 0.006 0.14 11.750 3.853 Philippines peso 58.539 0.0171 43.740 0.0229 Saudi Arabia riyal 5.0195 0.1992 3.7506 0.2666 Brent crude ($/bbl.) ICE-EU 91.42 0.73 0.80 134.00 57.36 Singapore dollar 1.7430 0.5737 1.3024 0.7678 South Africa rand 9.1861 0.1089 6.8638 0.1457 Gas oil ($/ton) ICE-EU 767.25 11.00 1.45 782.25 592.50 South Korea won 1522.71 0.0006567 1137.75 0.0008789 United Arab dirham 4.9158 0.2034 3.6730 0.2723 Taiwan dollar 40.495 0.02469 30.258 0.03305 Source: Thomson Reuters; WSJ Market Data Group SDR -f 0.8710 1.1481 0.6508 1.5366 Thailand baht 40.171 0.02489 30.015 0.03332 a-floating rate b-commercial rate c-government rate c-commercial rate d-Russian Central Bank rate f-Special Drawing Rights Follow the markets throughout the day with updated stock quotes, news and commentary at from the International Monetary Fund ; based on exchange rates for U.S., British and Japanese currencies. Also, receive email alerts that summarize the day’s trading in Europe and Asia. To sign up, go to Note: Based on trading among banks in amounts of $1 million and more, as quoted by Thomson Reuters.Major stock market indexes Stock indexes from around the world, grouped by region. Shown in local-currency terms. Price-to- PREVIOUS SESSION PERFORMANCE Price-to- PREVIOUS SESSION PERFORMANCEearnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. earnings ratio* Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. 16 ASIA-PACIFIC DJ Asia-Pacific 137.78 1.44 1.06% 12.0% 12.3% 27 Euro Zone Euro Stoxx 272.78 0.34 0.12% -0.7% 0.7% 15 Australia SPX/ASX 200 4694.22 17.98 0.38 -3.6 -0.2 14 Euro Stoxx 50 2782.39 1.00 0.04 -6.2 -4.4 24 China CBN 600 27120.68 -24.44 -0.09% -6.7 -8.2 21 Denmark OMX Copenhagen 408.42 -3.07 -0.75% 29.4 28.7 15 Hong Kong Hang Seng 23320.52 -128.26 -0.55 6.6 3.7 14 Finland OMX Helsinki 7386.43 14.73 0.20 14.4 19.0 20 India Sensex 19966.93 -25.77 -0.13 14.3 16.8 13 France CAC-40 3750.55 3.51 0.09 -4.7 -2.5 19 Indonesia Jakarta Composite 3696.260 1.680 0.05 45.8 47.2 14 Germany DAX 6947.72 -9.89 -0.14 16.6 19.4 ... Japan Nikkei Stock Average 10178.32 9.80 0.10 -3.5 1.6 11 Italy FTSE MIB 20120.80 66.71 0.33 -13.5 -12.2 ... Topix 879.22 2.01 0.23 -3.1 -1.2 10 Netherlands AEX 342.19 0.74 0.22 2.0 6.6 ... Malaysia Kuala Lumpur Composite 1500.98 -2.24 -0.15 17.9 18.2 ... Russia RTSI 1687.36 21.64 1.30 18.3 18.2 17 New Zealand NZSX-50 3283.298 -2.188 -0.07 1.6 4.3 9 Spain IBEX 35 10014.8 67.2 0.68 -16.1 -16.8 9 Pakistan KSE 100 11406.66 63.11 0.56 21.5 26.6 14 Switzerland SMI 6440.90 -42.54 -0.66 -1.6 -0.9 13 Philippines Manila Composite 4176.48 27.58 0.66 36.8 36.4 ... Turkey ISE National 100 66860.19 -78.89 -0.12 26.6 33.4 ... Singapore Straits Times 3172.44 -25.52 -0.80 9.5 13.7 12 U.K. FTSE 100 5745.32 -22.24 -0.39 6.1 7.9 11 South Korea Kospi 1957.26 7.00 0.36 16.3 20.5 17 AMERICAS DJ Americas 331.88 1.15 0.35 11.9 13.3 14 Taiwan Weighted 8624.01 38.24 0.45 5.3 12.7 14 Brazil Bovespa 69766.09 239.02 0.34 1.7 3.2 10 Thailand SET 1034.06 2.09 0.20 40.8 47.4 ... Argentina Merval 3422.43 -11.97 -0.35 47.5 57.4 23 EUROPE Stoxx Europe 600 270.94 -0.67 -0.25 7.0 8.8 17 Mexico IPC 37385.91 -13.56 -0.04 16.4 16.4 14 Stoxx Europe 50 2553.80 -10.32 -0.40 -1.0 1.1 Thomson Reuters is the primary data provider for several statistical tables in The Wall Street Journal, including foreign*P/E ratios use trailing 12-months, as-reported earnings stock quotations, futures and futures options prices, and foreign exchange tables. Reuters real-time data feeds are usedEuropean and Americas index data are as of 5:00 p.m. ET. Sources: Thomson Reuters; WSJ Market Data Group to calculate various Dow Jones Indexes.Dow Jones Indexes Price-to- Price-to- PERFORMANCE MSCI indexes PERFORMANCEDividend earnings Net Year- Three-yr., Dividend earnings Net Year- Three-yr., yield* ratio* Dows Jones Index Last change Daily to-date 52-wk. annualized yield* ratio* Dows Jones Index Last change Daily to-date 52-wk. annualized Developed and emerging-market regional and country indexes 2.17% 16 Global TSM 2530.06 13.66 0.54% 9.1% 9.4% -6.8% 2.25% 13 Shenzhen -c 440.48 -1.63 -0.37% 5.8% 4.7% -0.4% from MSCI Barra as of December. 03, 2010 1.97 15 Global DOW 2034.93 13.29 0.66 2.5 2.8 -10.1 1.81 18 U.S. TSM 12725.52 -5.49 -0.04 11.8 13.3 -4.9 Price-to- LOCAL-CURRENCY 2.25 14 Global Titans 50 171.17 0.57 0.33 -1.4 -2.5 -10.8 4.52 14 Global Select Div -d 212.21 1.22 0.58 5.1 4.0 -9.4 Dividend earnings PERFORMANCE 2.34 16 Asia/Pacific TSM 1363.60 13.05 0.97 12.1 12.4 -5.9 5.55 11 Asia/Pacific Select Div -d 295.18 3.36 1.15 9.9 7.5 -10.2 yield ratio Morgan Stanley Index Last Daily YTD 52-wk. 2.47 16 Asia/Pacific ex-Japan TSM 3513.02 20.90 0.60 14.2 15.8 -4.1 3.68 7 Hong Kong Select Div -d 218.53 1.79 0.82 16.6 12.4 1.0 2.40% 15 ALL COUNTRY (AC) WORLD* 319.66 -1.65% 6.8% 8.9% 2.68 15 Europe TSM 2681.47 31.46 1.19 0.2 -1.6 -12.2 4.01 14 U.S. Select Dividend -d 349.46 -1.15 -0.33 10.7 11.5 -9.3 2.50 15 World (Developed Markets) 1,237.41 -1.68 5.9 7.7 2.04 12 Emerging Markets TSM 4715.94 15.86 0.34 16.3 15.8 -3.8 1.56 19 Islamic Market 2158.89 12.86 0.60 9.3 10.4 -3.5 1.70 26 World Small Cap 224.34 -1.75 18.0 23.2 2.75 13 Asian Titans 50 140.11 1.96 1.42 4.3 3.8 -8.2 1.93 14 Islamic Market 100 2173.83 12.92 0.60 2.5 2.8 -6.0 2.55 13 BRIC 50 644.18 0.52 0.08 7.7 6.0 -5.4 2.22 14 Islamic China/HK Titans 30 1690.61 -5.73 -0.34 13.8 12.6 -7.0 2.50 15 Kokusai (World ex-Japan) 1,226.32 -1.68 5.7 7.7 2.55 13 CBN China 600 -c 27120.68 -24.44 -0.09 -6.7 -8.2 -9.4 1.29 17 Sustainability Korea 1398.74 20.31 1.47 16.0 16.6 -3.5 3.10 15 EAFE 1,595.08 -2.17 0.9 2.3 2.25 13 China Offshore 50 4327.67 -23.66 -0.54 6.1 2.1 -8.7 3.46 20 Brookfield Infrastructure 2240.73 5.19 0.23 10.6 14.5 -3.7 2.20 14 Emerging Markets (EM) 1,114.03 -1.48 12.6 16.9 2.25 13 Shanghai -c 363.66 -0.44 -0.12 -6.2 -7.7 -9.1 DJ-UBS Commodity -p 151.82 1.10 0.73 9.1 11.5 -5.0 2.70 15 AC ASIA PACIFIC EX-JAPAN 462.71 -1.66 11.1 15.0*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. Source: DowJones Indexes 2.30 14 AC Far East ex-Japan 513.29 -1.24 14.1 19.1 2.00 16 Japan 549.81 1.27 -3.3 5.3Cross rates U.S.-dollar and euro foreign-exchange rates in global trading 2.20 14 China 68.30 1.25 5.4 5.9 US$ A$ £ C$ YUAN EURO HK$ RUPEE RUPIAH YEN NZ$ WON RINGGIT PH. PESO S$ S FRANC TW$ BAHT 1.00 22 China A (China Domestic) 3,133.93 0.46 -7.3 -6.1 U.S. 1.012 0.636 1.003 6.663 0.747 7.762 44.928 9017.13 82.655 1.310 1137.75 3.148 43.740 1.302 0.976 30.257 30.015 Australia 0.988 0.629 0.991 6.585 0.739 7.672 44.406 8912.53 81.696 1.295 1124.55 3.111 43.233 1.287 0.965 29.907 29.667 2.50 22 Hong Kong 12,372.23 0.40 21.6 24.1 Britain 1.572 1.590 1.576 10.474 1.175 12.202 70.626 14174.93 129.934 2.059 1788.54 4.949 68.759 2.047 1.535 47.565 47.184 0.90 23 India 794.25 0.92 12.3 16.2 Canada 0.997 1.009 0.634 6.645 0.745 7.741 44.807 8992.85 82.432 1.307 1134.68 3.140 43.622 1.299 0.974 30.176 29.934 China 0.1501 0.152 0.095 0.150 0.112 1.165 6.743 1353.37 12.406 0.197 170.76 0.472 6.565 0.195 0.147 4.541 4.505 1.20 11 Korea 554.31 1.41 15.3 25.1 Euro 1.338 1.354 0.851 1.342 8.917 10.388 60.129 12068.08 110.621 1.753 1522.70 4.213 58.539 1.743 1.307 40.495 40.171 Hong Kong 0.129 0.130 0.082 0.129 0.858 0.096 5.788 1161.73 10.649 0.169 146.58 0.406 5.635 0.168 0.126 3.898 3.867 2.30 18 Malaysia 554.83 1.39 18.1 19.3 India 0.0223 0.0225 0.0142 0.0223 0.1483 0.0166 0.1728 200.70 1.8397 0.0292 25.32 0.0701 0.9736 0.0290 0.0217 0.6735 0.6681 2.80 15 Singapore 1,754.09 0.25 8.0 15.0 Indonesia 0.0001 0.0001 0.0001 0.0001 0.0007 0.0001 0.0009 0.0050 0.0092 0.0001 0.13 0.0003 0.0049 0.0001 0.0001 0.0034 0.0033 Japan 0.012 0.012 0.008 0.012 0.081 0.009 0.094 0.544 109.09 0.016 13.77 0.038 0.529 0.016 0.012 0.366 0.363 3.40 14 Taiwan 305.37 0.99 3.2 11.3 New Zealand 0.763 0.772 0.486 0.765 5.086 0.570 5.925 34.293 6882.78 63.091 868.44 2.403 33.387 0.994 0.745 23.096 22.910 2.70 15 Thailand 414.14 2.25 37.3 47.8 South Korea 0.0009 0.0009 0.0006 0.0009 0.0059 0.0007 0.0068 0.0395 7.93 0.0726 0.0012 0.0028 0.0384 0.0011 0.0009 0.0266 0.0264 Malaysia 0.318 0.321 0.202 0.319 2.117 0.237 2.466 14.272 2864.40 26.256 0.416 361.42 13.895 0.414 0.310 9.612 9.535 4.20 16 Australia 953.74 1.95 -4.7 -1.5 Philippines 0.023 0.023 0.015 0.023 0.152 0.017 0.177 1.027 206.15 1.890 0.030 26.01 0.072 0.030 0.022 0.692 0.686 Singapore 0.768 0.777 0.488 0.770 5.116 0.574 5.960 34.497 6923.74 63.466 1.006 873.61 2.417 33.585 0.750 23.233 23.047 5.30 17 New Zealand 83.66 0.57 -4.1 -2.0 Switzerland 1.024 1.036 0.652 1.027 6.824 0.765 7.950 46.016 9235.55 84.657 1.342 1165.31 3.224 44.800 1.334 30.990 30.742 1.80 17 US BROAD MARKET 1,380.41 -1.24 11.6 14.6 Taiwan 0.033 0.033 0.021 0.033 0.220 0.025 0.257 1.485 298.01 2.732 0.043 37.60 0.104 1.446 0.043 0.032 0.992 Thailand 0.033 0.034 0.021 0.033 0.222 0.025 0.259 1.497 300.42 2.754 0.044 37.91 0.105 1.457 0.043 0.033 1.008 3.30 14 EUROPE 94.06 1.64 6.5 13.1 Source: Thomson Reuters via WSJ Market Data Group *Twenty-three developed and 26 emerging markets Source: MSCI Barra
    • 28 THE WALL STREET JOURNAL. Monday, December 6, 2010 SCANNING THE GLOBEDow Jones Industrial Average P/E: 15 Nasdaq Composite Index P/E: 12* S&P 500 Index P/E: 18LAST: 11382.09 s 19.68, or 0.17% LAST: 2591.46 s 12.11, or 0.47% LAST: 1224.71 s 3.18, or 0.26%YEAR TO DATE: s 954.04, or 9.1% YEAR TO DATE: s 322.31, or 14.2% YEAR TO DATE: s 109.61, or 9.8%OVER 52 WEEKS s 993.19, or 9.6% OVER 52 WEEKS s 397.11, or 18.1% OVER 52 WEEKS s 118.73, or 10.7% High 12000 2600 1250 Close Low 11500 2500 1200 11000 2400 1150 t 10500 2300 1100 50–day moving average 10000 2200 1050 9500 2100 10003 10 17 24 1 8 15 22 29 5 12 19 26 3 3 10 17 24 1 8 15 22 29 5 12 19 26 3 3 10 17 24 1 8 15 22 29 5 12 19 26 3Sept. Oct. Nov. Sept. Oct. Nov. Sept. Oct. Nov. *Price-to-earnings ratio for the Nasdaq 100 Note: Price-to-earnings ratios are for trailing 12 months Sources: WSJ Market Data Group; Birinyi AssociatesDJIA component stocks U.S. stocks: most active... ADRs of Asian companies* Volume, CHANGE Volume, CHANGE 52-WEEK Volume, CHANGEStock Symbol in millions Latest Points Percentage Stock Symbol in millions Latest Points Percentage High Low Stock Symbol in OOOs Latest Points PercentageAT&T T 22.9 $28.49 –0.06 –0.21% Citigroup C 360.2 $4.45 0.03 0.68% $12.00 $9.30 TaiwanSemi TSM 22,780.0 $11.97 0.43 3.73%Alcoa AA 25.1 14.23 0.14 0.99 BankAm BAC 164.1 11.86 0.18 1.54 115.04 38.47 Baidu ADS BIDU 9,360.7 109.23 2.86 2.69AmExpress AXP 9.1 44.88 –0.10 –0.22 SPDR S&P 500 SPY 151.2 122.89 0.33 0.27 18.78 7.05 SuntechPwr STP 4,489.9 8.28 0.38 4.81BankAm BAC 164.1 11.86 0.18 1.54 SPDR FnclSelSct XLF 90.8 15.18 0.05 0.33 37.65 13.85 TataMtrs ADS TTM 4,292.8 31.65 0.35 1.12Boeing BA 3.4 66.54 –0.05 –0.08 CiscoSys CSCO 89.3 19.07 –0.15 –0.78 13.30 8.38 AU Optrncs AUO 2,844.0 10.05 –0.07 –0.69Caterpillar CAT 5.0 89.38 0.76 0.86 FordMotor F 67.3 16.80 0.02 0.12 92.62 58.38 BHPBilton ADS BHP 2,078.5 88.67 1.24 1.42Chevron CVX 6.7 84.89 0.39 0.46 Dryships DRYS 63.6 5.88 0.65 12.38 4.24 2.50 UtdMicro ADS UMC 1,964.3 3.28 0.04 1.23CiscoSys CSCO 89.3 19.07 –0.15 –0.78 Motorola MOT 63.6 8.24 0.27 3.39 53.16 29.90 CtripInt ADS CTRP 1,325.2 44.26 0.25 0.57CocaCola KO 10.3 64.50 –0.40 –0.62 Microsoft MSFT 52.6 27.02 0.13 0.48 5.70 4.48 MitsuUFJ ADS MTU 1,176.9 4.87 0.05 1.04Disney DIS 6.9 37.59 0.25 0.67 GenElec GE 50.2 16.78 0.10 0.60 7.70 4.45 Slcnwr ADS SPIL 1,093.4 5.50 0.11 2.04DuPont DD 13.2 49.24 0.61 1.25 iShrMSCIEmrgMkt EEM 44.7 47.14 0.17 0.36 15.75 9.40 ChMedTech ADS CMED 1,057.8 11.19 –0.37 –3.20ExxonMobil XOM 19.5 71.19 –0.29 –0.41 MGMResortsIntl MGM 43.3 13.50 0.65 5.06 15.68 10.34 ChinaUnicomHK CHU 995.6 13.74 –0.08 –0.58GenElec GE 50.2 16.78 0.10 0.60 Intel INTC 43.2 21.69 –0.01 –0.05 54.70 44.36 ChinaMobile CHL 908.0 50.40 –0.23 –0.45HewlettPk HPQ 17.7 43.03 –0.08 –0.19 Pfizer PFE 41.5 16.72 0.03 0.18 21.59 13.75 LG DisplayADS LPL 876.4 17.81 –0.17 –0.95HomeDpt HD 16.4 33.48 0.12 0.36 PacCapBcp PCBC 41.2 0.30 ... 0.99 40.45 25.85 SonyCp SNE 814.0 36.32 –0.24 –0.66Intel INTC 43.2 21.69 –0.01 –0.05 6.25 1.69 Rediff ADS REDF 801.9 4.49 –0.16 –3.44IBM IBM 3.7 145.38 0.20 0.14 Biggest gainers... 58.22 32.68 ICICI Bk ADS IBN 774.3 53.31 0.11 0.21JPMorgChas JPM 30.0 39.61 0.30 0.76 19.14 14.58 SK Tele ADS SKM 771.9 18.66 –0.14 –0.74JohnsJohns JNJ 9.9 62.56 –0.04 –0.06 DexOne DEXO 3,906.3 $6.70 1.91 39.87% 18.20 10.43 KoreaElecPwr KEP 733.8 12.60 0.11 0.88KftFoods KFT 7.4 30.32 –0.11 –0.36 BuildaBear BBW 960.8 7.91 1.95 32.72 49.66 36.80 Canon ADS CAJ 729.7 49.62 0.67 1.37McDonalds MCD 3.6 79.76 0.38 0.48 ChinaShenZhou SHZ 5,421.4 3.08 0.63 25.71 91.97 67.56 ToyotaMtr ADS TM 654.8 79.05 0.03 0.04Merck MRK 10.8 35.30 0.08 0.23 PrnctnNtlBcp PNBC 14.2 3.99 0.69 21.03 5.33 3.33 AdSemEg ADS ASX 640.6 5.29 –0.02 –0.38Microsoft MSFT 52.6 27.02 0.13 0.48 ChMasMedia CMM 531.5 3.34 0.56 20.36 38.25 28.33 HondaMtr ADS HMC 611.0 38.20 0.53 1.41PfizerProctGamb PFE PG 41.5 9.0 16.72 62.33 0.03 –0.03 0.18 –0.05 ...Biggest losers 21.99 8.40 9.10 2.22 eLong ADS Ku6Media LONG KUTV 604.9 17.64 0.61 595.0 8.00 –0.01 3.58 –0.123M MMM 2.9 86.94 0.43 0.50 Cagles A CGL/A 33.9 $8.25 –1.57 –15.99% 27.27 12.26 FocusMediaHldg FMCN 549.0 23.93 0.24 1.01TravelersCos TRV 3.2 54.86 –0.25 –0.45 VS2xVIXMedTerm TVIZ 5.0 91.41 –14.05 –13.32 71.99 49.55 Infosys INFY 484.6 69.33 0.06 0.09UnitedTech UTX 3.2 78.74 0.04 0.05 RIT Tch RITT 240.3 11.33 –1.61 –12.44 81.00 57.04 ChinaLfIns ADS LFC 413.2 64.82 –0.80 –1.22Verizon VZ 12.6 32.90 0.16 0.49 OrexigenThera OREX 8,376.7 4.81 –0.66 –12.07 9.55 5.90 TeleNZ ADS NZT 404.1 8.35 –0.02 –0.24WalMart WMT 10.1 54.62 –0.13 –0.24 MER Telmg MTSL 1,332.4 2.71 –0.37 –12.01 43.66 26.16 NTES 395.2 39.62 0.82 2.11 *Most active American depositary receipts tracked by Dow Jones Source: WSJ Market Data GroupGlobal government bonds U.S. Treasury yield curveLatest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year The curve shows the yield to maturity of current bills, notes and bonds; all data as of 3 p.m. ET.and 10-year government bonds around the world. Data as of 11 a.m. ET Country/ SPREAD OVER TREASURYS, in basis points YIELD TOTAL RETURN Coupon Maturity, in years Yield Latest Previous Month ago Year ago Previous Month ago Year ago Yield to Modified Month Quarter Year 5% Ryan Index maturity duration to-date to-date to-date 12-month 4.750% Australia 2 4.957% 448.5 440.3 464.2 361.7 4.943% 4.997% 4.347% 30-year Treasury 4.315% 16.74 –3.53 % –8.09 % 11.16 % 6.12 % 4.500 10 5.490 247.9 245.5 267.2 203.2 5.440 5.264 5.416 4 10-year Treasury 3.016 8.66 –1.88 –3.38 10.72 6.93 5.000 Austria 2 1.074 60.2 48.2 84.8 20.3 1.022 1.203 0.933 7 Year Treasury 2.347 6.43 –1.22 –2.07 11.10 7.93 s 3.900 10 3.305 29.4 31.2 31.8 13.1 3.297 2.910 3.515 One year ago 3 Five-year Treasury 1.610 4.80 –0.68 –1.12 8.40 6.06 2.000 Belgium 2 1.539 106.7 109.0 88.5 37.0 1.630 1.240 1.100 Ryan Index 2.090 6.92 –1.26 –2.48 8.18 5.53 3.750 10 3.894 88.3 102.5 72.9 20.3 4.010 3.321 3.587 3 Year Treasury 0.779 2.92 –0.22 –0.19 4.78 3.60 2 1.500 Canada 2 1.642 117.0 114.0 107.1 38.2 1.680 1.426 1.112 Two-year Treasury 0.468 1.98 –0.03 0.01 2.34 1.73 s Friday 3.500 10 3.204 19.3 23.2 28.3 -14.8 3.217 2.875 3.236 1 Year Treasury 0.264 0.96 ... 0.06 0.81 0.72 1 4.000 Denmark 2 1.135 66.3 53.9 89.5 138.9 1.079 1.250 2.119 Six-month Treasury 0.203 0.50 0.01 0.03 0.25 0.25 4.000 10 3.011 0.0 -1.9 0.5 16.4 2.966 2.597 3.548 Ryan Cash Index-a 0.188 0.44 0.01 0.04 0.34 0.33 0 0.750 France 2 1.079 60.7 42.6 84.6 52.2 0.966 1.201 1.252 Three-month bill 0.142 0.25 0.01 0.04 0.19 0.22 1 3 6 1 2 3 5 710 30 2.500 10 3.280 26.9 26.9 29.3 7.4 3.254 2.885 3.458 month(s) years One-month bill 0.142 0.07 ... 0.03 0.12 0.13 1.000 Germany 2 0.858 38.6 31.9 63.5 58.5 0.859 0.990 1.315 maturity a-Performance of a cash investment Source: Ryan ALM 2.500 10 2.854 -15.7 -16.5 -12.6 -19.4 2.820 2.466 3.190 0.360 Hong Kong 2 0.756 28.4 22.4 7.8 -38.0 0.764 0.433 0.350 2.913 2.440 2.000 10 Italy 2 2.358 -9.8 188.6 -15.3 192.5 -38.3 163.2 -112.9 83.2 2.832 2.465 2.209 1.987 2.255 1.562 Key money rates 3.750 10 4.477 146.6 142.7 131.7 60.0 4.412 3.909 3.984 Latest 52 wks ago Latest 52 wks ago Offer Bid 0.200 Japan 2 0.182 -29.0 -35.3 -21.5 -54.9 0.187 0.140 0.181 Prime rates Euro Libor Eurodollars 1.200 10 1.209 -180.2 -177.5 -164.7 -209.9 1.210 0.945 1.285 U.S. 3.25% 3.25% One month 0.76375% 0.45500% One month 0.3500% 0.2500% 5.000 Netherlands 2 0.882 41.0 31.8 70.0 17.8 0.858 1.055 0.908 Canada 3.00 2.25 Three month 0.97125 0.68125 Three month 0.5500 0.4500 3.500 10 3.092 8.1 7.1 9.6 5.1 3.056 2.688 3.435 Japan 1.475 1.475 Six month 1.20625 0.98000 Six month 0.7500 0.6000 Britain 0.50 0.50 One year 1.48750 1.22250 One year 1.0500 0.8500 5.000 Portugal 2 4.524 405.2 386.9 326.3 52.8 4.409 3.618 1.258 ECB 1.00 1.00 Hibor 4.800 10 6.067 305.6 344.4 373.3 35.6 6.429 6.325 3.740 Switzerland 0.57 0.53 One month 0.20179 0.05000% Latest 52 wks ago 3.900 Spain 2 3.307 283.5 293.0 172.6 67.3 3.470 2.081 1.403 0.27107 Australia 4.75 3.75 Three month 0.10893 U.S. discount 0.75% 0.50% 4.850 10 5.115 210.4 216.9 169.9 37.7 5.154 4.291 3.761 Hong Kong 5.25 5.25 Six month 0.40179 0.25000 Fed-funds target 0.25 0.25 4.000 Switzerland 2 0.501 2.9 -3.5 14.8 -24.7 0.505 0.503 0.483 One year 0.74143 0.54000 Call money 2.00 2.00 2.000 10 1.712 -129.9 -130.0 -108.2 -147.0 1.685 1.510 1.914 Libor Asian dollars 4.500 U.K. 2 1.023 55.1 46.5 33.4 42.4 1.005 0.689 1.154 One month 0.26500% 0.23469% One month 0.2711% 0.24% Overnight repurchase rates 4.750 10 3.420 40.9 41.2 44.0 23.9 3.397 3.032 3.623 Three month 0.30344 0.25656 Three month 0.3090 0.2658 U.S. 0.32% 0.15% 0.500 U.S. 2 0.472 ... ... ... ... 0.540 0.355 0.730 Six month 0.46219 0.48375 Six month 0.4690 0.4938 U.K. (BBA) 0.548 0.473 2.625 10 3.011 ... ... ... ... 2.985 2.592 3.384 One year 0.78794 1.02563 One year 0.7900 1.0325 Euro zone 0.42 0.68 Source: Thomson Reuters Sources: WSJ Market Data Group; Reuters
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. ** 29 MARKETSCan Germany keep pulling load? FBI raises pressure billion). That would compare with Coupled with robust consumer [ Ahead of the Tape ]BY BRIAN BLACKSTONE Bumpy ride How many dollars one euro buys the ECB’s average weekly bond buys of about €1 billion in November. One caveat: Monday’s spending (usually the Achilles’ heel for Germany), the figures should point to German GDP on analyst $1.50 report will include only purchases growth of about 3% annualized Germany and the European made up to last Wednesday. this quarter, cementing growth BY SUSAN PULLIAMCentral Bank have taken a tag- 1.40 But the ECB’s actions well north of that for approach to keeping the ultimately are stopgap measures. Yet risks are mounting for 2011 The Federal Bureau of Investiga-euro zone afloat: The former 1.30 More important is the health of when an uncertain global outlook tion turned up the legal heat on ansupports the currency bloc’s the German economy, which threatens exports. Germany’s independent analyst who declined toeconomy, the latter its financial 1.20 accounts for 30% of euro-zone central bank, the Bundesbank, on help the government gather evi-markets. gross domestic product and has Friday forecast 2% growth for dence in an expansive insider-trad- Each has enough juice to play 1.10 one of its lowest deficit-to-GDP next year. ing investigation.its part into the new year. After ratios. This gives it the ability to That is down sharply from this The FBI served a subpoena Fri- 2010that, they may start to flag. cushion stagnation in Greece, year’s projected 3.6% rate, day to John Kinnucan, asking for Source: Thomson Reuters via WSJ Market For now, markets want to see Data Group Ireland and Spain, as well as the abnormally high for what in two years of records relating tothat the two are willing and able financial heft to lead rescues. recent years has been a slow- hedge-fund and mutual-fund clientsto do all they can to contain At the moment, German growing economy. In 2012, it of his independent research firm,Europe’s debt crisis. To that end, week fueled a rally in debt issued industry, the backbone of its forecasts growth of just 1.5%. Broadband Research. He said theinvestors will watch Monday’s by Portugal and Ireland. To show export-driven economy, is ending That may be enough to keep subpoena also requested records re-release of data on the ECB’s latest the ECB brought out the big guns, 2010 on a high note. Data due German unemployment low. It lating to his technology-industrybond-buying activity. economists said Monday’s report Wednesday are likely to show a doesn’t necessarily leave a lot of contacts, trading records, credit- Talk in financial markets of needs to indicate purchases monthly rise in industrial scraps, though, for euro-area card statements and phone bills.heavy ECB bond purchases last increased toward €10 billion ($13.4 production in October of about 1%. laggards like Greece and Ireland. The subpoena, issued by a grand jury in the U.S.’s insider-trading probe, said the requested docu- ments involved “alleged” violationsEurope isn’t a top worry for U.S. banks including conspiracy, fraud, securi- ties fraud and false statements. Mr. Kinnucan says he has done nothing wrong. On Nov. 19, The Wall Street Jour-BY DAN FITZPATRICK The top 10 U.S. banks held 96% calming nervous investors. rope. Exposure to sovereign debt in nal detailed an email sent by Mr. of that risk, or $140 billion in the Bank of America Corp., the na- all countries totaled $285 billion as Kinnucan to his clients. The email The largest U.S. banks aren’t im- second quarter of 2010. The $140 tion’s largest bank by assets, said in of Sept. 30, according to the filing. described a visit by two FBI agentsmune to Europe’s credit woes, but billion represented 20% of total Tier a recent filing that Greece, Ireland, A Citigroup spokesperson declined on Oct. 25, during which the agentsanalysts view the overall exposure 1 capital held by these institutions. Italy, Portugal and Spain account for further comment. asked him to record conversationsas low on the list of concerns for “We are far more worried about $18 billion in risk, and of that $2 Ireland accounted for $8.9 billion with one of his contacts. The agentsthe industry. the value of commercial real estate billion is sovereign debt. The bank in risk during the third quarter for asked Mr. Kinnucan to record his Investor fears of contagion have than what will happen with Spain, said it has a hedge on $1.5 billion of Goldman Sachs Group Inc., with conversations with a client at SACsubsided—at least temporarily—in Italy and Portugal,” said RBC Capital the $2 billion in sovereign exposure. $231 million of that tied to govern- Capital Advisors LP, the hedge fundthe wake of indications from the Eu- Markets banking analyst Gerard A spokesman said that amount of ment sources. But the investment run by Steven Cohen, a person fa-ropean Central Bank that it would Cassidy. risk is small when compared with bank mentioned no other fiscally miliar with the matter any country in need. But if The impact of current problems its loan book of nearly $1 trillion. troubled countries in Europe. The SAC has declined to comment, asconcern mounts again, the risk is in Europe doesn’t compare to what J.P. Morgan Chase & Co., the securities firm had $46.6 billion of has the FBI.“modest” and “manageable,” said U.S. banks experienced in the 1980s second-largest U.S. bank as mea- sovereign obligations outside the That FBI visit is connected to aJonathan Glionna, senior U.S. banking when a Latin American debt crisis sured by assets, said in a filing that U.S. as of Sept. 30, 2010, up from broader insider-trading investiga-analyst for Barclays Capital. created big losses for large institu- its exposure to the five most volatile $38.6 billion in December 2009. But tion that is expected to produce The U.S. banking industry’s total tions, Mr. Cassidy said. One result of European countries was “less than those obligations were mostly secu- some charges by year end, peopleexposure to Greece, Ireland, Portu- that earlier international crisis is $20 billion” and sovereign exposure rities issued by the governments of familiar with the matter and Spain dropped to $146 bil- that banks, by U.S. law, are now ob- represented “less than half” of the the U.K., Japan and Germany, as op- Three days after the Journal’slion in the second quarter of 2010, ligated to detail their exposure to a net number. A spokeswoman de- posed to relatively weaker European first article on the probe, the FBIcompared with $176 billion in the particular country if it exceeds clined to comment further. countries. A Goldman spokesman raided three hedge funds and sentthird quarter of 2009, according to 0.75% of assets or 15% of capital. Citigroup Inc. said in a filing declined to comment. subpoenas to several mutual fundsfigures compiled by Barclays Capi- In light of Europe’s recent sover- that its overall exposure to Italy was Italy accounted for 10% of Mor- and hedge funds. The U.S. has ar-tal. The information, taken from re- eign-debt woes, some institutions $17.2 billion at the end of the third gan Stanley’s credit exposure to rested an employee of Primary Glo-ports made by banks to federal reg- are listing exposures to Greece, Ire- quarter, but it didn’t break out its over-the-counter derivative prod- bal Research LLC, a Mountain View,ulators, includes loans, debt, equity, land, Italy, Portugal and Spain even amount of sovereign debt in that ucts in the third quarter; Spain was Calif., expert-network firm, onforeign exchange and repurchase if the risk doesn’t exceed the federal country, nor did it mention the responsible for 2%, according to a charges of distributing inside infor-agreements. reporting threshold, as a way of other problematic countries in Eu- filing. mation. The employee’s lawyer has declined to comment. Mr. Kinnucan, 53 years old, hasChina online bookseller to lead week’s offerings become a subject of praise and criti- cism for his determination to fight the U.S. On Friday, he said he plans to defend himself if he faces crimi-BY LYNN COWAN tail platform. Taobao, a consumer- nal charges, which he says he be- to-consumer portal, recently lieves is likely. This week is an active one for launched its business-to-consumer Mr. Kinnucan said the subpoenathe U.S. IPO market, with eight sales forum, Taobao Mall, as a sepa- was delivered at 7:30 a.m. local timedeals vying for investors’ attention, rate site called at his Portland, Ore., home as hisbut the clear leader of the pack is Though Dangdang will be in the children were preparing to go toonline bookseller E-Commerce spotlight this week, there are four school. “We heard a loud knock onChina Dangdang Inc. other Chinese companies hoping to the door,” he said, where he was The Beijing-based company, come public in the U.S. as bankers met by an FBI agent who deliveredwhich has been operating for more push through the final stretch of the the subpoena. During the visit, Mr. than a decade, is year, including Internet television Kinnucan said, his 13-year-oldIPO getting top billing company Inc., listing on daughter began to cry. After the FBIFOCUS as China’s version the NYSE as YOKU; mobile-phone agent left, he says his wife bought a of It application store Sky-mobi Ltd., hard drive so he can begin down-is listing its initial public offering of headed for the Nasdaq under MOBI; loading the files necessary to com- Imaginechinastock on the New York Stock Ex- film distributor Bona Film Group ply with the government’s request.change under the symbol DANG, Ltd., also Nasdaq-bound under Mr. Kinnucan said he was inter-with hopes of raising $221 million. BONA; and auto dealer Lentuo In- ested at one point in becoming a Dangdang claims to be the larg- sells its own merchandise and allows third-party sales. ternational Inc., going to the NYSE lawyer. “I guess now I’ll get aest book retailer by revenue in under LAS. For a little bit of variety, chance,” he said.China and is expanding into general But amid all the buzz over Dang- other merchandise, more than 80% a Taiwanese maker of light-emitting In a separate development Fri-merchandise areas. The company dang, investors shouldn’t lose sight of its net revenue is still derived diodes, SemiLEDs Corp., is going to day, hedge fund Loch Capital Man-has churned out at a 56% increase in of the fact that the company re- from books and other media prod- the Nasdaq under LEDS. agement LLC, which has beentotal net revenue in the first nine mains foremost a bookseller—com- ucts. Just last year, Dangdang There are just two U.S. IPOs list- raided by the FBI, said it isn’t beingmonths of the year, compared to the parable to only if you launched its market- ing in New York this week: gas part- targeted by the government in thesame period of 2009. That is the roll back the hands of time. place program to allow third-party nership owner Targa Resources investigation. Other funds underkind of top-line growth that Ameri- Amazon makes more from elec- sales of merchandise alongside its Corp. and First Republic Bank, a scrutiny, including Diamondbackcan investors love to see from tronics and general merchandise own products. Its biggest rival in commercial bank and trust company Capital Management LLC and LevelChina, and analysts are predicting a than books now, and while Dang- this space is Alibaba Group’s Tao- based in San Francisco that caters Global Investors LP, also have saidgood first-day pop for the stock. dang is pushing toward sales of, China’s largest Internet re- to wealthy customers. they aren’t targets.
    • 30 THE WALL STREET JOURNAL. Monday, December 6, 2010 HEARD ON THE STREETEmail: FINA NCIA L A NA LYSIS & COMMENTARY cheer for housing in jobs Tokyo’s struggle to keep factories Housing in the U.S. can’t catch abreak. Surprisingly upbeat pending- Passed overhome-sales data last week gavemarkets a reason to smile. Friday’s Fixed interest rate on on own shoresdisappointing employment figures a 30-year mortgageand rising mortgage rates might 5.5 %make them cry. The jobs figures are a particularworry. Until people feel that em-ployment prospects are definitely 5.0getting better, they will remain less Tokyo’s challenge: Stop that gla- rose in the third quarter for the firstlikely to buy a home. And Friday’s cier. time in more than three years.figure didn’t provide comfort. A survey released on Friday Tokyo is making the right noises. November employment gains of shows that Japanese manufacturers A panel chaired by Prime Minister 4.5just 39,000 jobs fell far short of ex- expect overseas production to ac- Naoto Kan recently released recom-pectations for about 140,000 new count for 35% of revenue in three mendations to help promote domes-jobs. Also, private-sector job growth years, up from 32% currently and tic investment. Reducing corporatewas a tepid 50,000, while the range 23% a decade ago, the Japan Bank taxes and red tape and inking high- Bloomberg Newsof industries hiring slimmed to 52% 4.0 for International Cooperation says. quality trade pacts were key points.from 58% the previous month. At 2010 The shift is more advanced in some But for now, there is little mean-the same time, the unemployment Source: Freddie Mac sectors than in others. Auto makers ingful action. A first step would berate ticked up to 9.8% in November say nearly 38% of their revenue will to eliminate disincentives to stay,from 9.6% the previous month, Rising mortgage rates could choke off a housing recovery. be produced abroad in three years, such as the time to it takes to getbringing the level again perilously up from 34% now. The difference is approval for a new factory. Thatclose to the psychologically signifi- in mortgage rates. Freddie Mac re- punch. Superlow mortgage rates can equal to about $20 billion. takes less than a year in China andcant 10% mark. ported Thursday that the average, compensate somewhat for weak em- This represents a substantial re- Thailand, versus up to more than Interest rates, meanwhile, have weekly rate on a 30-year-fixed mort- ployment. Strong jobs growth can allocation of spending. Sumitomo four years in Japan.risen in recent weeks despite the gage rose to 4.46% as of Dec. 2. Al- offset high rates. When both are go- Heavy Industries expects three- And that isn’t enough. While Ja-latest move by the Federal Reserve though this is still low by historical ing the wrong way, chances for a fourths of its budgeted $325 million pan’s corporate tax rate hasn’tto purchase $600 billion of govern- standards, it is the highest average quick housing recovery grow dim- in capital expenditure to go overseas changed in a decade, neighbors suchment bonds, with the yield on the rate since early August and marks a mer. If anything, they increase the in the year through March. Domestic as Singapore, South Korea and Tai-10-year Treasury now hovering swift rise from the low of 4.17% danger that prices and sales activity spending will go only to replace old wan have been through multiple cy-close to 3%. seen the week of Nov. 11. might not have bottomed. production equipment, rather than cles of cuts. This isn’t just luring That has reversed a recent slide That is something of a one-two —David Reilly for expansion, the company says. Japanese companies away. Last year, The urge for companies such as Procter & Gamble moved its Asia Sumitomo is easy enough to see: It headquarters to Singapore from Ja- will benefit from lower tax and labor pan, and Nokia did the same with its costs, move closer to final customers development unit. and minimize currency risks. The good news is that the pace of But this is something the govern- the overseas shift means it isn’t too ment wants to stop. The move off- late for Japan’s leadership to create shore will take with it jobs, income, incentives for companies to stay or and tax revenue. In that sense, the to come. If it can do something survey overshadows a bit of good about the glacial pace of policy mak- news earlier last week that showed ing, that is. spending on plant and equipment —James Simms The long sayonara Proportion of revenue produced over- seas by Japanese manufacterers 50% Electronics 40 Automobiles 30 The world’s most expensive residential street is in Overall manufacturers HONG KONG 20 FY’01 ’03 ’05 ’07 ’09 ’11* Note: Fiscal years end March 31 * Forecast Sources: Japan Bank for International Cooperation; Bloomberg News (photo) Whether it’s for real estate, wine or IPOs, Hong Kong continues to A tanker under construction at a shipyard in Yokosuka City, Japan establish itself as one of the most dynamic markets in the world. For expanded coverage of Hong Kong-related finance, real estate, life & style and more from The Wall Street Journals award-winning OVERHEARD Hong Kong bureau, visit the new Hong Kong section of today. Even the savviest “Jeopardy!” con- chine. testant would struggle with: “It’s the The snag: Making the bet might best-performing currency against the have required some travel. “I’ve never U.S. dollar in 2010.” The correct reply: heard of it, never seen it traded any- “What is the tugrik?” where,” said Brian Dolan, chief cur- The Mongolian currency has rency strategist at Gain Capital. “I bested all others so far, rising 16.7% honestly think you have to go there against the dollar. Why? It is an ex- to a bank and exchange it.” otic manifestation of a simple trend: Easier to stick with the Costa THE HONG KONG SECTION FROM Currencies of countries with strong Rican colon or Thai baht. Better exports to China have soared. Mon- beaches if trading in person—and golia is rich in copper, gold, coal, iron those currencies are the second- and and other mineral deposits. At least third-best performers of 2010, with two-thirds of its exports go to feed gains of more than 11%. neighboring China’s industrial ma- —
    • Monday, December 6, 2010 THE WALL STREET JOURNAL. 31 MARKETS LINEUPMoving the Asian index movers…markets Nikkei Stock Average Straits-Times Hang Seng ASX 200At right, Japan’s benchmark stock index and Japan 10178.32 Singapore 3172.44 Hong Kong 23320.52 Australia 4694.20the biggest movers among the larger Asianstocks indexes and stocks Friday. Below each s 0.10% or 9.82 t 0.80% or 25.52 t 0.55% or 128.28 s 0.38% or 17.96index are its most actively traded stocks. Thecharts show the percentage change in each Trading was cautious ahead of the U.S. jobs Investors appeared to be taking profits fol- Stocks reversed early gains, after remarks The market had a fairly tepid end to fourindex’s or stock’s value, rather than the point report, released well after the close. A 1.4% lowing the recent recovery in risk appetite. out of Beijing sparked concerns about new previous bullish sessions, as it failed tochange, for purposes of comparison. The index gain for the week was the fifth in a row, Phillip Securities said it expects the STI to tightening measures. Still, the index snapped match strong Wall Street gains. It ended the with the index up 11% since early November. track the S&P500 index in the short-term. a three-week losing streak with a 1.9% gain. week up 2.1%, halting three weeks of losses.level or stock price is indicated on each axis. Allindexes and stocks are shown in local currencyterms. 15000 4500 30000 7500 12500 3750 25000 6250 10000 3000 20000 5000 7500 2250 15000 3750 5000 1500 10000 2500 D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N 2010 2010 2010 2010 Follow the markets throughout the day, Volume Change Volume Change Volume Change Volume Change with updated stock quotes, news and Stock in millions Close Net % Stock in millions Close Net % Stock in millions Close Net % Stock in millions Close Net % commentary at Mizuho Financial 71.25 135 unch. … Genting Spore 200.90 2.09 0.05 2.45 Icbc 286.60 5.98 unch. –0.99 Ing Indust Units 42.42 0.52 0.00 … Mtshbsh Fin Grp 47.29 402 1 0.25 Golden Agri 38.55 0.74 –0.01 –1.33 CCB 252.43 7.10 –0.11 –1.53 Telstra 38.14 2.82 0.00 … Also, receive emails that summarize 35.02 Hitachi 38.39 410 3 0.74 Noble Grp 14.69 2.07 –0.02 –0.96 Bank Of China 248.28 4.23 –0.05 –1.17 Lynas Fpo 1.58 -0.08 –4.53 the day’s trading in Europe and Asia. 21.15 Toshiba 37.49 443 –4 –0.89 Sing Telecom 14.26 3.09 –0.04 –1.28 ChinaPetroChem 140.56 7.26 –0.13 –1.76 Sundance Fpo 0.36 380.00 1.41 To sign up, go to FujiElecHldgs 31.21 239 3 1.27 Olam Inter 9.64 3.15 0.08 2.61 PetroChina 131.87 9.93 –0.04 –0.40 OZ Minerals 21.13 1.63 -0.01 –0.31Asian stocks in the newsTaiwan Smcndtr Mfg Hon Hai Precision Ind Samsung Elec Lenovo Grp MediaTekTaiwan TW$68.30 Taiwan TW$112.50 Korea 894,000 won Hong Kong HK$5.58 Taiwan TW$422.50 s 3.2% or TW$2.10 s 3.2% or TW$3.50 s 4.1% or 35,000 won s 4.5% or HK$0.24 s 7.0% or TW$27.50The contract maker of chips plans to increase The contract maker of electronic products The company named a new generation of The stock has climbed 8.3% over a five-day Investors bet that demand ahead of the Lunarproduction capacity by more than 30% next plans to expand its production facilities in leaders. rally. New Year could lift revenue at techyear. China. heavyweights.In Taiwan dollars 100 In Taiwan dollars 250 In won 1750000 In Hong Kong dollars 10 In Taiwan dollars 750 80 200 1400000 8 600 60 150 1050000 6 450 40 100 700000 4 300 20 50 350000 2 150 D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N 2010 2010 2010 2010 2010Price-to-earnings ratio 12 Price-to-earnings ratio 13 Price-to-earnings ratio 9 Price-to-earnings ratio 30 Price-to-earnings ratio 13Earnings per share, past four quarters 5.93 Earnings per share, past four quarters 8.72 Earnings per share, past four quarters 104701.79 Earnings per share, past four quarters 0.19 Earnings per share, past four quarters 33.03Dividend yield 4.4 Dividend yield 1.6 Dividend yield 1.4 Dividend yield 0.2 Dividend yield 6.1 PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wksTechnology 2.0% 4.5% 16.4% Indus Gds & Svcs 1.2% 4.1% 21.6% Technology 2.0% 4.5% 16.4% Technology 2.0% 4.5% 16.4% Technology 2.0% 4.5% 16.4%Taiwan Smcndtr Mfg 3.2% 6.1% 11.1% Hon Hai Precision Ind 3.2% 1.4% -8.7% Samsung Elec 4.1% 6.8% 17.3% Lenovo Grp 4.5% 8.3% 30.1% MediaTek 7.0% 6.2% -15.8%Hyundai Merchant Mar Fast Retailing China Shenhua Energy Fraser & Neave DLFKorea 44,400 won Japan ¥12,990 Hong Kong HK$30.65 Singapore S$6.17 India 306.55 rupee t 2.8% or 1,300 won t 3.0% or ¥400 t 3.0% or HK$0.95 t 3.1% or S$0.20 t 4.5% or 14.55 rupeeWorries remained about how the Hyundai Domestic same-store sales at its Uniqlo Beijing froze contract coal prices for next year The stock couldn’t hold on to most of The stock pulled back after a 12% surge overGroup will pay for Hyundai Engineering & casual-clothing chain slid 14.5% in November. as part of its efforts to contain inflation. Thrusday’s 2.6% gain. three days.Construction.In won 60000 In yen 25000 In Hong Kong dollars 60 In Singapore dollars 10 In rupee 600 48000 20000 48 8 480 36000 15000 36 6 360 24000 10000 24 4 240 12000 5000 12 2 120D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N 2010 2010 2010 2010 2010Price-to-earnings ratio 34 Price-to-earnings ratio 27 Price-to-earnings ratio 16 Price-to-earnings ratio 10 Price-to-earnings ratio 30Earnings per share, past four quarters 1321.76 Earnings per share, past four quarters 482.70 Earnings per share, past four quarters 1.97 Earnings per share, past four quarters 0.63 Earnings per share, past four quarters 10.10Dividend yield 1.1 Dividend yield 1.3 Dividend yield 2.0 Dividend yield 2.8 Dividend yield 0.7 PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE PERCENTAGE CHANGE Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wks Daily 1 wk. 52 wksIndus Gds & Svcs 1.2% 4.1% 21.6% Retail 1.0% 1.9% 11.8% Basic Resources 1.2% 3.7% 11.3% Indus Gds & Svcs 1.2% 4.1% 21.6% Real Estate 0.5% 2.9% 7.6%Hyundai Merchant Mar -2.8% 15.2% 71.1% Fast Retailing -3.0% -4.2% -19.0% China Shenhua Energy -3.0% -7.4% -21.2% Fraser & Neave -3.1% ... 53.9% DLF -4.5% 6.5% -19.4%
    • 32 THE WALL STREET JOURNAL. Monday, December 6, 2010 MARKETS Published by Dow Jones Publishing Company (Asia). Printed in Hong Kong by Superflag Printing and Communication Limited. 8 Chun Ying Street, NT. Printed in Indonesia by PT Gramedia Printing Group, Jalan Palmerah Selatan 22-28, Jakarta 10270. Printed in Japan by Yomiuri Shimbun, 1-7-1, Otemachi, Chiyoda-ku, Tokyo 100-8055. 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 KHL Printing Co. Pte Ltd., 57 Loyang Drive, Singapore 508968. Printed and distributed in Taiwan by The China Post, 8 Fu Shun Street, Taipei 104. Printed in Thailand by Nation Multimedia Group Public Co., Ltd., 1854 Bangna-Trad Road, (K.M. 4.5), Prakanong, BangkokChina reveals huge appetite for goldBY CAROLYN CUI country began allowing more banks This year, fears of inflation haveAND CHRIS OLIVER Hidden demand to import and export gold, opening driven many Chinese investors to Gold’s daily settlement on the up the gold market to the institu- include gold in their portfolios. At Gold’s record rally has been at- continuous front-month contract tions and their clients. the Shanghai Gold Exchange, tradingtributed to everything from worries Friday: $1,405.40 a troy ounce, Then last week, the Chinese se- volume increased 43%, to 5,014.5about inflation and the dollar to the up $16.90 curities regulator approved the tons, in the first 10 months of 2010,emergence of exchange-traded country’s first gold fund designed to exchange Chairman Shen Xiangrong $1,400funds. One big factor many may invest in overseas-listed gold ETFs, said, according to Xinhua.have missed: huge buying from a move analysts interpreted as an- At a speech at the China GoldChina. 1,300 other bullish sign for gold. and Precious Metals Summit in Data cited last week by China’s “The big picture is that China is Shanghai Thursday, Mr. Shen de-state-run Xinhua news agency 1,200 continuing to relax the rules govern- tailed the size of China’s importsshowed that China imported 209.7 ing the domestic gold market,” said this year, Xinhua said. Those pur-metric tons of gold in the first 10 1,100 Martin Murenbeeld, chief economist chases were big enough to absorbmonths of the year, a fivefold in- of DundeeWealth Inc., which over- all the gold that the International Bloomberg Newscrease compared with the same pe- 1,000 Gold bars sees $69.9 billion in assets. “What Monetary Fund had shed during 10260. Published and printed on behalf of the Wall Street Journal India Publishing Pvt Ltd, 517B World Trade Centre, Barakhamba Lane, New Delhi 110001 by Mr Suman Dubey at A-8 Sector 7, Gautam Budh Nagar, Noida -201301 and PLOT No.EL208, TTC Industrial Area, Mahape, Navi Mumbai - 400710 (Maharashtra), India, Editor: Suman Dubey, phone: +91-11-6462 0215. ACP no. F.2 (T/3) Press / 2009 FACSIMILE EDITION.riod last year. 2010 made in we are seeing is the latent demand that period, which stood at 148.6 That surpassed purchases made Source: WSJ Market Data Group China that has been there all the time and tons. Imports also dwarfed buyingby ETFs and surprised analysts, who now can be exercised in the market by the SPDR Gold Shares, theuntil now had no clear insight into because now the market is freed.” world’s largest gold-backed ETF,the size of China’s buying. round of bond buying. Gold prices port that undermined confidence in Until several years ago, China’s which added 159.48 tons of gold to “Everybody in the gold market hit an all-time high of $1,409.80 a the dollar and sent investors into gold market was strictly controlled its holdings in the same period.knew there was a surge in invest- troy ounce on Nov. 9. safe-haven assets. by the central bank, which bought China also is home to a boomingment demand, but they didn’t know On Friday, gold for December de- China’s gold import growth is a all the gold mined domestically. It gold-mining industry. On Wednes-it was China,” said Jeff Christian, livery rose $16.90 an ounce to reminder of the country’s huge but then sold the metal to jewelry mak- day, China’s Ministry of Industrymanaging director at CPM Group. $1,405.40 on the Comex division of nascent purchasing power. ers. The country, which is now the and Information Technology said Gold demand in general has the New York Mercantile Exchange, It comes as the government loos- largest gold producer, remained the nation’s gold production reachedsoared globally this year, as a result leaving the metal up 28% for the ens its restrictions on gold pur- largely self-sufficient in gold, with 277.017 metric tons in the January-of the sovereign-debt crisis in Eu- year. Friday’s rise was driven by a chases by financial institutions and imports at a meager 31 metric tons to-October period, up 8.8% from therope and the Federal Reserve’s new weaker-than-expected U.S. jobs re- individual investors. In August, the in 2009, according to GFMS Ltd. same period last year.