2014 01 09 cmyk NA 04online.wsj.com/public/resources/documents/PageOne010914.pdf · BY ELLEN...
1
YELLOW ****** THURSDAY, JANUARY 9, 2014 ~ VOL. CCLXIII NO. 7 WSJ.com HHHH $2.00 DJIA 16462.74 g 68.20 0.4% NASDAQ 4165.61 À 0.3% NIKKEI 16121.45 À 1.9% STOXX 600 329.75 À 0.1% 10-YR. TREAS. g 15/32 , yield 2.991% OIL $92.33 g $1.34 GOLD $1,225.30 g $4.10 EURO $1.3575 YEN 104.87 Fashion Institute of Technology TODAY IN PERSONAL JOURNAL Jackets Go Vroom PLUS The Best (and Worst) Airlines TODAY IN PERSONAL JOURNAL Jackets Go Vroom PLUS The Best (and Worst) Airlines Federal Reserve officials in December turned their attention to the risk of dangerous financial bubbles emerging as they scanned a brightening economic outlook and formulated a plan to gradually wind down their bond- buying program this year. While officials agreed that threats to financial stability were modest, the issue was at the center of wide-ranging dis- cussions about emerging threats to the economy, according to minutes of the central bank’s Dec. 17-18 policy meeting, which were released Wednesday with the traditional three-week lag. Watching for bubble threats could become one of the first big issues on the plate of Fed Vice Chairwoman Janet Yellen, who takes the reins as chairwoman on Feb. 1 after Ben Bernanke’s term as the Fed’s leader ends. The Fed decided last month to reduce its monthly bond pur- chases to $75 billion from $85 billion. Barring a surprise in the economic data, the Fed is ex- pected to shrink the size of its bond-buying again at its next policy meeting Jan. 28-29. “The Fed is looking for evi- dence that they may be creating asset bubbles,” said Dan Green- haus, chief global strategist at brokerage firm BTIG LLC. “That’s better than not looking.” Mr. Bernanke said in his news conference after the December meeting the Fed would reduce the bond purchases “in further Please turn to the next page BY JON HILSENRATH AND VICTORIA MCGRANE Fed Eyes Bubble Risks in Markets Iraq’s Shiite-led government paused on Wednesday on the brink of a military assault against al Qaeda-linked Sunni militants that posed the risk of exacting a high civilian toll and plunging the country deeper into sectarian conflict. Senior U.S. officials, including Vice President Joseph Biden, have urged Iraq’s Prime Minister Nouri al-Maliki to secure the support of local Sunni leaders before attacking to drive the ex- tremists from Fallujah, which sits in the heartland of Iraq’s Sunni minority. Many Sunni tribal leaders, alienated and an- gered by Mr. Maliki, have re- fused. The standoff tests the U.S.’s remaining leverage in Iraq, which has declined since Ameri- can forces fought alongside Iraqis to subdue Islamist fighters in Fallujah in two large battles during the nearly decadelong U.S.-led occupation. In the latest incursion, armed Sunni extremists seized control of Fallujah and parts of Ramadi, capital of Anbar province, more than a week ago. The fighting has left hundreds of civilians, soldiers and militants dead or wounded, according to Iraqi offi- cials, and the U.N. says thou- sands of families have been forced to flee. An attack on a Sunni city by the mainly Shiite army “is ex- actly what every Sunni has feared since the Americans left,” said Kenneth Pollack, an expert on Iraq at the Brookings Institu- tion in Washington. “That is their nightmare,” he said. “It will be bloody, it will be nasty, and a lot of civilians will Please turn to page A8 BY ELLEN KNICKMEYER AND MARGARET COKER U.S. Leverage in Iraq Tested As Fears of Civil War Mount LAC-MÉGANTIC, Quebec—Trains have resumed rolling through this small community again, past 47 Christmas trees in front of St. Agnes Church that honor the townspeople killed last July when a run- away oil train left their downtown in an inferno. The 1 a.m. crash of a driverless train that had broken free from its moorings and barreled downhill before derailing sent waves of flame coursing through town. “The downtown vanished,” says Roger Garant, a retiree and city councilman. That raises the question, beyond still-unhealed psychic wounds from the tragedy, of where the money will come from to rebuild. This, in turn, leads unavoidably to a commercial issue in the midst of the human ones: insurance. The cleanup cost alone at Lac-Mégantic is run- ning about $4 million a week, according to Mr. Ga- rant. It may total $200 million, the Canadian gov- ernment has said. Beyond that comes the expenses for rebuilding the library and more than 100 de- stroyed homes and businesses, and settling lawsuits being filed by survivors. The train’s operator, the Montreal, Maine & At- lantic Railway Ltd., had liability insurance of $25 million. That is about standard for a line of its size. The railroad has filed for bankruptcy protection. So far, the Canadian and provincial governments are picking up the steadily growing tab. Please turn to page A12 BY BETSY MORRIS ‘A BET ON THE COMPANY’ Fiery Oil-Train Accidents Raise Railroad Insurance Worries Emails suggesting that close aides to New Jersey Gov. Chris Christie engineered traffic jams as political retribution against a Democratic mayor are turning into a major test for the national ambitions of a popular Republi- can considered a leading 2016 presidential contender. On Wednesday, the newly re- leased emails showed that a top Christie aide suggested that an- other longtime associate of the governor create “traffic prob- lems” in Fort Lee, N.J. Weeks later, the second official imposed lane closures leading to the George Washington Bridge that choked the town across the Hud- son River from New York City in auto gridlock. Town officials said school buses and emergency ve- hicles were severely delayed in some instances. The emails brought the bridge incident, which has simmered for months, to the doorstep of Mr. Christie. For the first time, a high-ranking member of his in- ner circle has been tied to the lane closures that Democrats al- leged were payback for a Demo- cratic mayor who didn’t endorse the Republican governor’s 2013 re-election bid. Mr. Christie said in a state- ment after the release of the emails: “What I’ve seen today for the first time is unacceptable.” He said he had been “misled by a member of my staff,” and called the lane closures “completely in- appropriate and unsanctioned conduct.” He added, “One thing is clear: this type of behavior is unacceptable and I will not toler- ate it, because the people of New Jersey deserve better.” The governor is widely pre- sumed to be a presidential candi- date in 2016, bolstered by his ac- tions in the aftermath of Please turn to page A4 BY TED MANN AND HEATHER HADDON Bridge-Spat Emails Pose Questions For Christie Indonesia Keeps Wary Watch on Spewing Volcano ON GUARD: Indonesian farmers on a motorbike drive by Mount Sinabung in North Sumatra, near the village of Tiga Kicat. The volcano has erupted numerous times since Saturday, sending forth clouds of ash and gas and prompting authorities to expand an evacuation zone in place for months. Dedy zulkifli/European Pressphoto Agency ALBALAT DELS SORELLS, Spain—No luxury car maker had ever mounted an operation quite like the assembly lines tucked into José María Calero’s ware- houses amid the orange groves in eastern Spain. Here, he and his team turned out sleek cars on de- mand for buffs who had always dreamed of own- ing Ferraris. Among the satisfied custom- ers was María Lapiedra, a minor Spanish celebrity, Latin-language scholar and soft-core porn ac- tress. “I made more friends than ever when I had my Ferrari,” said Ms. Lapiedra on her website. “Everyone wanted a ride,” she added. Clearly unhappy with Mr. Calero were Ferrari executives who had never heard of the Spanish car mechanic and didn’t know until recently what he was up to. Mr. Calero’s “Ferraris” were built on the chassis of bat- tered old Toyotas using fiber- glass and manufactured parts. His customers knew that, of course, but were willing to over- look the fact since Mr. Calero’s €40,000 ($54,500) price was a mere fifth of the real deal. Ferrari alerted Spanish police, who raided Mr. Calero’s two warehouses and shut him down in July, seizing 17 replica Ferraris and two replica Aston Martins. Now Spanish courts will decide the fate of what industrial prop- erty experts call one of the big- gest car counterfeiting ventures on record, a case that could help Please turn to page A12 BY DAVID ROMÁN To Ferrari, Imitation Is Not the Sincerest Form of Flattery i i i Maker of Real Italian Sports Car Takes Aim At Maker of Fake Ones Built From Toyotas A replica Ferrari The Journal’s home for breaking tech news and reviews: WSJ.com/Tech WSJ. D TECHNOLOGY CONTENTS Corporate News.... B2,3 Global Finance............ C3 Heard on the Street C8 In the Markets........... C4 Leisure & Arts............ D4 Opinion.................. A13-15 Small Business.......... B5 Sports.............................. D5 Style & Travel......... D2,3 Technology ............... B6,7 U.S. News................. A2-5 Weather Watch........ B8 World News......... A6-10 s Copyright 2014 Dow Jones & Company. All Rights Reserved > What’s News i i i World-Wide n Iraq paused on the brink of an attack aimed at driving Sunni militants from Fallujah, an assault the U.S. fears could worsen sectarian conflict. A1 n Syrian rebels ousted an al Qaeda branch from Aleppo but the fate of the group’s Western hostages was uncertain. A6 n South Sudan talks stalled after the government rejected calls to free political prisoners, sparking more clashes. A9 n A top aide’s ties to a con- troversial traffic snag brought the incident to New Jersey Gov. Christie’s doorstep. A1 n California geologists un- veiled two maps of earthquake faults that could alter devel- opment in Los Angeles. A5 n New York Gov. Cuomo said he would move to make medical marijuana available to seriously ill patients. A3 n A Canadian died from the H5N1 strain of avian flu, the first fatality in North Amer- ica from the virus. A10 n The White House backed extending space-station op- erations to at least 2024. A2 n Several oil tankers were still burning in Canada, a day after a train derailed. A12 n Libya responded to a vow by rebels to sell oil with a threat to sink their cargoes. A6 n Died: Thomas Jones, 93, engineer who led Northrop. B3 i i i F ed officials discussed the risk of financial bubbles last month as they formulated a plan to reduce bond buying, meeting minutes showed. A1 n Dish Network is pulling its bid for LightSquared, the tele- com firm that is seeking to exit bankruptcy protection. B3 n Barnes & Noble named its president, Michael Huseby, as CEO. He said he would focus on sales of digital content. B1 n BlackRock agreed to ter- minate an analyst-survey pro- gram in a settlement with New York’s attorney general. C2 n Blue-chip stocks retreated despite good news on the job market. The Dow fell 68.20. C4 n E*Trade’s online system shut down, raising fresh ques- tions about the security of electronic marketplaces. C1 n T-Mobile said it added 800,000 of the wireless indus- try’s most lucrative customers in the fourth quarter. B6 n Delaware’s governor nomi- nated Leo Strine as chief justice of the state Supreme Court. B3 n IBM is creating a business unit for Watson, aiming to ex- pand the computer’s reach. B2 n A deposition by SAC’s Cohen can’t be introduced in a former manager’s trial, a judge said. C3 n WWE is launching an online video channel that will offer round-the-clock wrestling. B1 Business & Finance Giffords Marks Tragedy in Flight Three years after the Tucson shooting that killed six and left her and 12 others injured, former U.S. Congresswoman Gabrielle Giffords went sky diving near Phoenix. A2 Iraqi refugees land in limbo... A8 Al Qaeda reversal in Syria ...... A6 NBC/Associated Press Canadian tankers burn a day after derailment... A12 Copyright © 2013, Oracle and/or its affiliates. All rights reserved. More Enterprise SaaS Applications Than Any Other Cloud Services Provider Oracle Cloud Applications ERP Financials Procurement Projects Supply Chain HCM Human Capital Recruiting Talent CRM Sales Service Marketing C M Y K Composite Composite MAGENTA CYAN BLACK P2JW009000-6-A00100-10EFFB7178F CL,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO P2JW009000-6-A00100-10EFFB7178F
Transcript of 2014 01 09 cmyk NA 04online.wsj.com/public/resources/documents/PageOne010914.pdf · BY ELLEN...
YELLOW
* * * * * * THURSDAY, JANUARY 9, 2014 ~ VOL. CCLXIII NO. 7 WSJ.com HHHH $2 .00
DJIA 16462.74 g 68.20 0.4% NASDAQ 4165.61 À 0.3% NIKKEI 16121.45 À 1.9% STOXX600 329.75 À 0.1% 10-YR. TREAS. g 15/32 , yield 2.991% OIL $92.33 g $1.34 GOLD $1,225.30 g $4.10 EURO $1.3575 YEN 104.87
FashionInstituteof
Techno
logy
TODAY IN PERSONAL JOURNAL
Jackets Go VroomPLUS The Best (and Worst) Airlines
TODAY IN PERSONAL JOURNAL
Jackets Go VroomPLUS The Best (and Worst) Airlines
Federal Reserve officials inDecember turned their attentionto the risk of dangerous financialbubbles emerging as theyscanned a brightening economicoutlook and formulated a plan togradually wind down their bond-buying program this year.
While officials agreed thatthreats to financial stabilitywere modest, the issue was atthe center of wide-ranging dis-cussions about emerging threatsto the economy, according tominutes of the central bank’sDec. 17-18 policy meeting, whichwere released Wednesday withthe traditional three-week lag.
Watching for bubble threatscould become one of the first bigissues on the plate of Fed ViceChairwoman Janet Yellen, whotakes the reins as chairwomanon Feb. 1 after Ben Bernanke’sterm as the Fed’s leader ends.
The Fed decided last month toreduce its monthly bond pur-chases to $75 billion from $85billion. Barring a surprise in theeconomic data, the Fed is ex-pected to shrink the size of itsbond-buying again at its nextpolicy meeting Jan. 28-29.
“The Fed is looking for evi-dence that they may be creatingasset bubbles,” said Dan Green-haus, chief global strategist atbrokerage firm BTIG LLC.“That’s better than not looking.”
Mr. Bernanke said in his newsconference after the Decembermeeting the Fed would reducethe bond purchases “in further
Pleaseturntothenextpage
BY JON HILSENRATHAND VICTORIA MCGRANE
Fed EyesBubbleRisks inMarkets
Iraq’s Shiite-led governmentpaused on Wednesday on thebrink of a military assaultagainst al Qaeda-linked Sunnimilitants that posed the risk ofexacting a high civilian toll andplunging the country deeper intosectarian conflict.
Senior U.S. officials, includingVice President Joseph Biden,have urged Iraq’s Prime Minister
Nouri al-Maliki to secure thesupport of local Sunni leadersbefore attacking to drive the ex-tremists from Fallujah, whichsits in the heartland of Iraq’sSunni minority. Many Sunnitribal leaders, alienated and an-gered by Mr. Maliki, have re-fused.
The standoff tests the U.S.’sremaining leverage in Iraq,which has declined since Ameri-can forces fought alongsideIraqis to subdue Islamist fighters
in Fallujah in two large battlesduring the nearly decadelongU.S.-led occupation.
In the latest incursion, armedSunni extremists seized controlof Fallujah and parts of Ramadi,capital of Anbar province, morethan a week ago. The fightinghas left hundreds of civilians,soldiers and militants dead orwounded, according to Iraqi offi-cials, and the U.N. says thou-sands of families have beenforced to flee.
An attack on a Sunni city bythe mainly Shiite army “is ex-actly what every Sunni hasfeared since the Americans left,”said Kenneth Pollack, an experton Iraq at the Brookings Institu-tion in Washington.
“That is their nightmare,” hesaid. “It will be bloody, it will benasty, and a lot of civilians will
PleaseturntopageA8
BY ELLEN KNICKMEYERAND MARGARET COKER
U.S. Leverage in Iraq TestedAs Fears of Civil War Mount
LAC-MÉGANTIC, Quebec—Trains have resumedrolling through this small community again, past 47Christmas trees in front of St. Agnes Church thathonor the townspeople killed last July when a run-away oil train left their downtown in an inferno. The1 a.m. crash of a driverless train that had brokenfree from its moorings and barreled downhill beforederailing sent waves of flame coursing throughtown.
“The downtown vanished,” says Roger Garant, aretiree and city councilman.
That raises the question, beyond still-unhealedpsychic wounds from the tragedy, of where themoney will come from to rebuild. This, in turn, leadsunavoidably to a commercial issue in the midst of
the human ones: insurance.The cleanup cost alone at Lac-Mégantic is run-
ning about $4 million a week, according to Mr. Ga-rant. It may total $200 million, the Canadian gov-ernment has said. Beyond that comes the expensesfor rebuilding the library and more than 100 de-stroyed homes and businesses, and settling lawsuitsbeing filed by survivors.
The train’s operator, the Montreal, Maine & At-lantic Railway Ltd., had liability insurance of $25million. That is about standard for a line of its size.The railroad has filed for bankruptcy protection. Sofar, the Canadian and provincial governments arepicking up the steadily growing tab.
PleaseturntopageA12
BY BETSY MORRIS
‘A BET ON THE COMPANY’
Fiery Oil-Train AccidentsRaise Railroad Insurance Worries
Emails suggesting that closeaides to New Jersey Gov. ChrisChristie engineered traffic jamsas political retribution against aDemocratic mayor are turninginto a major test for the nationalambitions of a popular Republi-can considered a leading 2016presidential contender.
On Wednesday, the newly re-leased emails showed that a topChristie aide suggested that an-other longtime associate of thegovernor create “traffic prob-lems” in Fort Lee, N.J. Weekslater, the second official imposedlane closures leading to theGeorge Washington Bridge thatchoked the town across the Hud-son River from New York City inauto gridlock. Town officials saidschool buses and emergency ve-hicles were severely delayed insome instances.
The emails brought the bridgeincident, which has simmered formonths, to the doorstep of Mr.Christie. For the first time, ahigh-ranking member of his in-ner circle has been tied to thelane closures that Democrats al-leged were payback for a Demo-cratic mayor who didn’t endorsethe Republican governor’s 2013re-election bid.
Mr. Christie said in a state-ment after the release of theemails: “What I’ve seen today forthe first time is unacceptable.”He said he had been “misled by amember of my staff,” and calledthe lane closures “completely in-appropriate and unsanctionedconduct.” He added, “One thingis clear: this type of behavior isunacceptable and I will not toler-ate it, because the people of NewJersey deserve better.”
The governor is widely pre-sumed to be a presidential candi-date in 2016, bolstered by his ac-tions in the aftermath of
PleaseturntopageA4
BY TED MANNAND HEATHER HADDON
Bridge-SpatEmails PoseQuestionsFor Christie
Indonesia Keeps Wary Watch on Spewing Volcano
ON GUARD: Indonesian farmers on a motorbike drive by Mount Sinabung in North Sumatra, near the village of Tiga Kicat. The volcano has eruptednumerous times since Saturday, sending forth clouds of ash and gas and prompting authorities to expand an evacuation zone in place for months.
Dedyzulkifli/Eu
ropean
Presspho
toAgency
ALBALAT DELS SORELLS,Spain—No luxury car maker hadever mounted an operation quitelike the assembly lines tuckedinto José María Calero’s ware-houses amid the orange groves ineastern Spain. Here, he and histeam turned outsleek cars on de-mand for buffswho had alwaysdreamed of own-ing Ferraris.
Among thesatisfied custom-ers was MaríaLapiedra, a minorSpanish celebrity, Latin-languagescholar and soft-core porn ac-tress. “I made more friends thanever when I had my Ferrari,” saidMs. Lapiedra on her website.
“Everyone wanted a ride,” sheadded.
Clearly unhappy with Mr.Calero were Ferrari executives
who had never heard of theSpanish car mechanic and didn’tknow until recently what he wasup to. Mr. Calero’s “Ferraris”were built on the chassis of bat-tered old Toyotas using fiber-glass and manufactured parts.His customers knew that, ofcourse, but were willing to over-
look the factsince Mr.Calero’s €40,000($54,500) pricewas a mere fifthof the real deal.
Ferrari alertedSpanish police,who raided Mr.Calero’s two
warehouses and shut him downin July, seizing 17 replica Ferrarisand two replica Aston Martins.Now Spanish courts will decidethe fate of what industrial prop-erty experts call one of the big-gest car counterfeiting ventureson record, a case that could help
PleaseturntopageA12
BY DAVID ROMÁN
To Ferrari, ImitationIs Not the Sincerest Form of Flattery
i i i
Maker of Real Italian Sports Car Takes AimAt Maker of Fake Ones Built From Toyotas
A replica Ferrari
The Journal’s home forbreaking tech news andreviews: WSJ.com/Tech
WSJ.DTECHNOLOGY
CONTENTSCorporate News.... B2,3Global Finance............ C3Heard on the Street C8In the Markets........... C4Leisure & Arts............ D4Opinion.................. A13-15
Small Business.......... B5Sports.............................. D5Style & Travel......... D2,3Technology............... B6,7U.S. News................. A2-5Weather Watch........ B8World News......... A6-10
s Copyright 2014 Dow Jones & Company.All Rights Reserved
>
What’sNews
i i i
World-Widen Iraq paused on the brink ofan attack aimed at drivingSunni militants from Fallujah,an assault the U.S. fears couldworsen sectarian conflict. A1n Syrian rebels ousted an alQaeda branch from Aleppo butthe fate of the group’s Westernhostages was uncertain. A6n South Sudan talks stalledafter the government rejectedcalls to free political prisoners,sparking more clashes. A9n A top aide’s ties to a con-troversial traffic snag broughtthe incident to New JerseyGov. Christie’s doorstep. A1n California geologists un-veiled two maps of earthquakefaults that could alter devel-opment in Los Angeles. A5n New York Gov. Cuomosaid he would move to makemedical marijuana availableto seriously ill patients. A3n A Canadian died from theH5N1 strain of avian flu, thefirst fatality in North Amer-ica from the virus. A10n The White House backedextending space-station op-erations to at least 2024. A2n Several oil tankerswerestill burning in Canada, a dayafter a train derailed. A12n Libya responded to a vowby rebels to sell oil with athreat to sink their cargoes. A6nDied: Thomas Jones, 93,engineer who led Northrop. B3
i i i
Fed officials discussed therisk of financial bubbles
last month as they formulateda plan to reduce bond buying,meeting minutes showed. A1nDish Network is pulling itsbid for LightSquared, the tele-com firm that is seeking toexit bankruptcy protection. B3n Barnes & Noble named itspresident, Michael Huseby, asCEO. He said he would focuson sales of digital content. B1n BlackRock agreed to ter-minate an analyst-survey pro-gram in a settlement with NewYork’s attorney general. C2n Blue-chip stocks retreateddespite good news on the jobmarket. The Dow fell 68.20. C4n E*Trade’s online systemshut down, raising fresh ques-tions about the security ofelectronic marketplaces. C1n T-Mobile said it added800,000 of the wireless indus-try’s most lucrative customersin the fourth quarter. B6nDelaware’s governor nomi-nated Leo Strine as chief justiceof the state Supreme Court. B3n IBM is creating a businessunit for Watson, aiming to ex-pand the computer’s reach. B2nA deposition by SAC’s Cohencan’t be introduced in a formermanager’s trial, a judge said. C3nWWE is launching an onlinevideo channel that will offerround-the-clock wrestling. B1
Business&Finance
Giffords MarksTragedy in Flight
Three years after the Tucsonshooting that killed six andleft her and 12 others injured,former U.S. CongresswomanGabrielle Giffords went skydiving near Phoenix. A2
Iraqi refugees land in limbo... A8 Al Qaeda reversal in Syria...... A6
NBC
/AssociatedPress
Canadian tankers burn a day after derailment... A12
Copyright © 2013, Oracle and/or its affiliates. All rights reserved.
More Enterprise SaaS ApplicationsThan Any Other Cloud Services Provider
Oracle CloudApplications
ERPFinancialsProcurementProjectsSupply Chain
HCMHuman CapitalRecruitingTalent
CRMSalesServiceMarketing
CM Y K CompositeCompositeMAGENTA CYAN BLACK
P2JW009000-6-A00100-10EFFB7178F CL,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WEBG,BM,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO
P2JW009000-6-A00100-10EFFB7178F
