2014 03 13 cmyk NA 04 - The Wall Street...
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YELLOW ***** THURSDAY, MARCH 13, 2014 ~ VOL. CCLXIII NO. 59 WSJ.com HHHH $2.00 DJIA 16340.08 g 11.17 0.1% NASDAQ 4323.33 À 0.4% NIKKEI 14830.39 g 2.6% STOXX 600 327.95 g 1.1% 10-YR. TREAS. À 11/32 , yield 2.726% OIL $97.99 g $2.04 GOLD $1,370.30 À $23.80 EURO $1.3904 YEN 102.76 TODAY IN PERSONAL JOURNAL Men Who Love Shirts PLUS The Newest Hidden Fees for Travelers CONTENTS Corporate News.... B2,3 Global Finance............ C3 Heard on the Street C10 In the Markets........... C4 Leisure & Arts............ D5 Opinion.................. A13-15 Small Business ......... B4 Sports.............................. D6 Style & Travel......... D2,3 Technology ............... B6,7 U.S. News................. A2-6 Weather Watch........ B8 World News.......... A7-11 s Copyright 2014 Dow Jones & Company. All Rights Reserved > What’s News i i i World-Wide n U.S. investigators suspect that a missing Malaysian air- liner stayed in the air for hours past the time it reached its last confirmed location, based on engine data transmitted from the aircraft. A1, A8 n The U.S. scrambled to avert a diplomatic crisis with Moscow ahead of a vote in Crimea on leaving Ukraine and returning to Russia. A1 n The U.S. could suffer a na- tionwide blackout if saboteurs knocked out nine key substa- tions on a high-demand day, ac- cording to a federal analysis. A1 n Sebelius said health-insur- ance premiums are “likely to go up” in 2015 but at a slower pace than before. A4 n Obama is ordering new rules on overtime pay, sparking debate over whether the move will boost workers’ wages. A4 n Israel’s parliament passed a law stripping ultraorthodox Jewish men of their exemp- tion from the military. A9 n Gaza militants fired rock- ets into Israel in the largest at- tack since a 2012 cease-fire. A9 n The top Democrat on the House intelligence panel called for an end to the NSA’s phone- data collection program. A2 n Turkish police clashed with protesters after the funeral of a teen killed by police. A7 n China’s Xi called on the mil- itary to defend national inter- ests amid concerns in Asia over Beijing’s assertiveness. A8 n Syria’s regime is trying to contain supporters’ anger after nuns freed by rebels expressed sympathy for their captors. A11 i i i G M said it knew of faulty ig- nition switches linked to a recall and 12 deaths as early as 2001 and has yet to determine the problem’s full scope. B1 n The Fed studied a foreign- exchange benchmark months before global regulators warned of potential manipulation, but took no public action. C1 n Wall Street’s bonus pool swelled by 15% to $26.7 bil- lion this year, a study sug- gests, as employees cashed in their restricted shares. C1 n The FTC opened a probe into Herbalife, which has been battling hedge-fund manager Ackman over his allegations that it is a pyramid scheme. B1 n Citigroup cut the pay of the head of its embattled Mexico unit and said it may cut other employees’ compensation. C1 n An ex-Credit Suisse banker admitted to helping U.S. clients evade taxes in a plea deal be- fore a Virginia court. C3 n Puerto Rican bonds surged as much as 7.5%, a day after in- vestors scrambled to get a piece of the $3.5 billion debt sale. C1 n The S&P 500 edged up to 1868.20, while the Dow shed 11.17 points to 16340.08 on wor- ries over growth in China. C4 n Ex-Goldman trader Tourre was fined over $825,000 for violating securities laws and defrauding investors. C3 n “Candy Crush” maker King Digital is targeting a $7.6 billion market value with its IPO. B1, B7 n Energy XXI agreed to buy EPL Oil & Gas in a $1.53 bil- lion cash-and-stock deal. B3 Business & Finance The U.S. launched a last-ditch effort Wednesday to avert a poten- tially costly diplomatic crisis with Moscow ahead of a vote Sunday in Crimea on whether the region should leave Ukraine and return to Russia. Top Obama administration offi- cials sought to ramp up the pres- sure on Moscow even as they braced for a possible diplomatic failure. U.S. Secretary of State John Kerry said Russia “may well” end up annexing the restive region, and began to focus on steps Mos- cow could take to slow the process. The mood in Washington had an 11th-hour feel. Mr. Kerry planned a hasty diplomatic trip to London to meet his Russian coun- terpart on Friday—two days before the fateful referendum—while the administration’s warnings took on an even more dire tone. Mr. Kerry told lawmakers that if Russia made the wrong decisions and the West turned to punitive sanctions, things could “get ugly fast” and “in multiple directions.’’ But there was growing interna- tional resignation over the future of Crimea, which was part of Rus- sia until the 1950s and still hosts Russia’s Black Sea Fleet. German Chancellor Angela Merkel, who has led Europe’s re- sponse to Russia’s occupation of Crimea, and her team have come to the conclusion that the chance to roll back Moscow’s intervention has passed, according to officials and analysts. President Barack Obama met the new Ukrainian Prime Minister Arseniy Yatsenyuk at the White House, saying he hopes those be- Please turn to page A10 BY CAROL E. LEE AND JAY SOLOMON Scramble To Ease Ukraine Crisis LONDON—One of the first things Mark Carney did when he took over the Bank of England last July was to remove a paint- ing of Montagu Norman from a wall near his office. Mr. Norman was the eccentric BOE governor whose policies are often blamed for exacerbating the Great De- pression—mistakes Mr. Carney didn’t want to repeat. In Mr. Carney’s eight tumultu- ous months at the helm, during which the central bank bungled its economic forecasts and got dragged into a foreign-exchange probe, the United Kingdom has enjoyed a surprising economic revival. Now, looming decisions about when to increase interest rates are shaping up as his most important test, and a critical case study for the U.S. and other developed economies. The U.K., U.S., Europe and Ja- pan have held interest rates at record lows since the financial crisis in an effort to encourage lending, energize growth and bring down unemployment. As their economies recover, all must decide when to declare victory and let borrowing costs rise. All want to hold off as long as possible, but getting a message across about how long has be- come complicated. If growth and hiring live up to expectations, Please turn to page A12 BY JASON DOUGLAS AND JON HILSENRATH ‘EXPERIMENTAL PHASE’ From London, a Test Case For World’s Central Bankers Sources: U.K. Office of National Statistics; U.S. Labor Dept. The Wall Street Journal Job Drive U.K. and U.S. unemployment rates have fallen more quickly of late than central banks anticipated. 10 0 2 4 6 8 % ’08 ’09 ’10 ’11 ’12 ’13 ’14 2007 U.K.: 7.2% December U.S.: 6.7% February Gas Suspected in Deadly Blast That Leveled New York Buildings COLLAPSE: Three women died, more than two dozen people were injured and others were missing after an explosion Wednesday destroyed two buildings. A2 Justin Heiman/Getty Images Canadians Gone Wild: Critter Tally Brings Out Their Competitive Side i i i Volunteers Vie to Count the Most Animals For Bragging Rights, Fish Measuring Tape FORT ST. JOHN, British Co- lumbia—It’s not always easy to spot an ungainly ungulate in the dead of winter, even in the re- mote back country along the Alaska Highway where road signs routinely warn drivers of moose crossing and the only lo- cally owned and operated radio station is proudly known as Moose FM. That is the challenge for a hardy brace of outdoor enthu- siasts who take to their snow- mobiles and snowshoes for two days each winter to produce a tally of ev- ery critter in the nearby stretches of the Peace River val- ley, from squirrels and foxes to elk and bull moose. What makes the count in this former trading post unusual: unlike most wildlife counts for larger mammals in North Amer- ica, it relies on roughly a couple of dozen volunteer “citizen sci- entists” instead of professional biologists. The official slogan for the event: “Take a walk on the wild side—and count them!” Hard-core participants com- pete fiercely to spot the most animals in the contest, which is sponsored by the forestry arm of British Columbia, Can- ada’s western- most province. In addition to vying for brag- ging rights, they are en- tered in a drawing for prizes such as fish measuring tape kits, hand warmers and snare wire, supplied by local mer- chants. Please turn to page A12 BY CHESTER DAWSON Western Canadian moose The U.S. could suffer a coast- to-coast blackout if saboteurs knocked out just nine of the country’s 55,000 electric-trans- mission substations on a scorch- ing summer day, according to a previously unreported federal analysis. The study by the Federal En- ergy Regulatory Commission concluded that coordinated at- tacks in each of the nation’s three separate electric systems could cause the entire power network to collapse, people fa- miliar with the research said. A small number of the coun- try’s substations play an outsize role in keeping power flowing across large regions. The FERC analysis indicates that knocking out nine of those key substations could plunge the country into darkness for weeks, if not months. “This would be an event of unprecedented proportions,” said Ross Baldick, a professor of electrical engineering at the Uni- versity of Texas at Austin. No federal rules require utili- ties to protect vital substations except those at nuclear power plants. Regulators recently said they would consider imposing security standards. FERC last year used software to model the electric system’s performance under the stress of losing important substations. The substations use large power transformers to boost the volt- age of electricity so it can move long distances and then to re- duce the voltage to a usable level as the electricity nears homes and businesses. The agency’s so-called power- flow analysis found that different sets of nine big substations pro- duced similar results. The Wall Street Journal isn’t publishing the list of 30 critical substations studied by FERC. The commis- sion declined to discuss the anal- ysis or to release its contents. Some federal officials said the conclusions might overstate the Please turn to page A6 BY REBECCA SMITH Nation’s Power Grid Vulnerable To Sabotage Germany’s Merkel digs in for long-term conflict ...................... A10 EU slows Russian pipelines... A10 Heard on the Street.................. C10 U.S. investigators suspect that Malaysia Airlines Flight 370 stayed in the air for about four hours past the time it reached its last con- firmed location, according to two people familiar with the details, raising the possibility that the plane could have flown on for hun- dreds of additional miles under conditions that remain murky. The investigators believe the plane flew for a total of five hours based on data automatically down- loaded and sent to the ground from the Boeing Co. 777’s engines as part of a routine maintenance and monitoring program. That raises a host of new ques- tions and possibilities about what happened aboard the widebody jet carrying 239 people, which van- ished from civilian air-traffic con- trol radar over the weekend, about one hour into a flight to Beijing from Kuala Lumpur. Six days after the mysterious disappearance prompted a massive international air and water search that so far hasn’t produced any re- sults, the investigation appears to be broadening in scope. U.S. counterterrorism officials are pursuing the possibility that a pilot or someone else on board the plane may have diverted it toward an undisclosed location after inten- tionally turning off the jetliner’s transponders to avoid radar detec- tion, according to one person tracking the probe. The investigation remains fluid, and it isn’t clear whether investi- gators have evidence indicating possible terrorism or espionage. So far, U.S. national security officials have said that nothing specifically points toward terrorism, though they haven’t ruled it out. But the huge uncertainty about where the plane was headed, and why it continued flying so long without working transponders, has Please turn to page A8 BY ANDY PASZTOR Missing Airplane Flew On for Hours Engine Data Suggest Malaysia Flight Was Airborne Long After Radar Disappearance, U.S. Investigators Say 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 P2JW072000-5-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 P2JW072000-5-A00100-10EFFB7178F
Transcript of 2014 03 13 cmyk NA 04 - The Wall Street...
YELLOW
* * * * * THURSDAY, MARCH 13, 2014 ~ VOL. CCLXIII NO. 59 WSJ.com HHHH $2 .00
DJIA 16340.08 g 11.17 0.1% NASDAQ 4323.33 À 0.4% NIKKEI 14830.39 g 2.6% STOXX600 327.95 g 1.1% 10-YR. TREAS. À 11/32 , yield 2.726% OIL $97.99 g $2.04 GOLD $1,370.30 À $23.80 EURO $1.3904 YEN 102.76
TODAY IN PERSONAL JOURNAL
Men Who Love ShirtsPLUS The Newest Hidden Fees for Travelers
CONTENTSCorporate News.... B2,3Global Finance............ C3Heard on the Street C10In the Markets........... C4Leisure & Arts............ D5Opinion.................. A13-15
Small Business......... B4Sports.............................. D6Style & Travel......... D2,3Technology............... B6,7U.S. News................. A2-6Weather Watch........ B8World News.......... A7-11
s Copyright 2014 Dow Jones & Company.All Rights Reserved
>
What’sNews
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World-Widen U.S. investigators suspectthat a missing Malaysian air-liner stayed in the air for hourspast the time it reached itslast confirmed location, basedon engine data transmittedfrom the aircraft. A1, A8n The U.S. scrambled toavert a diplomatic crisis withMoscow ahead of a vote inCrimea on leaving Ukraineand returning to Russia. A1n The U.S. could suffer a na-tionwide blackout if saboteursknocked out nine key substa-tions on a high-demand day, ac-cording to a federal analysis.A1n Sebelius said health-insur-ance premiums are “likely togo up” in 2015 but at aslower pace than before. A4nObama is ordering newrules on overtime pay, sparkingdebate over whether themovewill boost workers’ wages.A4n Israel’s parliament passed alaw stripping ultraorthodoxJewish men of their exemp-tion from the military. A9nGazamilitants fired rock-ets into Israel in the largest at-tack since a 2012 cease-fire. A9nThe top Democrat on theHouse intelligence panel calledfor an end to the NSA’s phone-data collection program. A2nTurkish police clashed withprotesters after the funeral ofa teen killed by police. A7nChina’s Xi called on the mil-itary to defend national inter-ests amid concerns in Asiaover Beijing’s assertiveness. A8nSyria’s regime is trying tocontain supporters’ anger afternuns freed by rebels expressedsympathy for their captors. A11
i i i
GMsaid it knew of faulty ig-nition switches linked to a
recall and 12 deaths as early as2001 and has yet to determinethe problem’s full scope. B1n The Fed studied a foreign-exchange benchmarkmonthsbefore global regulators warnedof potential manipulation,but took no public action. C1nWall Street’s bonus poolswelled by 15% to $26.7 bil-lion this year, a study sug-gests, as employees cashedin their restricted shares. C1n The FTC opened a probeinto Herbalife, which has beenbattling hedge-fund managerAckman over his allegationsthat it is a pyramid scheme. B1nCitigroup cut the pay of thehead of its embattled Mexicounit and said it may cut otheremployees’ compensation. C1nAn ex-Credit Suisse bankeradmitted to helping U.S. clientsevade taxes in a plea deal be-fore a Virginia court. C3nPuerto Rican bonds surgedasmuch as 7.5%, a day after in-vestors scrambled to get a pieceof the $3.5 billion debt sale. C1nThe S&P 500 edged up to1868.20, while the Dow shed11.17 points to 16340.08 onwor-ries over growth in China. C4n Ex-Goldman trader Tourrewas fined over $825,000 forviolating securities laws anddefrauding investors. C3n “Candy Crush”maker KingDigital is targeting a $7.6 billionmarket valuewith its IPO.B1, B7n Energy XXI agreed to buyEPL Oil & Gas in a $1.53 bil-lion cash-and-stock deal. B3
Business&Finance
The U.S. launched a last-ditcheffortWednesday to avert a poten-tially costly diplomatic crisis withMoscow ahead of a vote Sunday inCrimea on whether the regionshould leave Ukraine and return toRussia.
Top Obama administration offi-cials sought to ramp up the pres-sure on Moscow even as theybraced for a possible diplomaticfailure. U.S. Secretary of StateJohn Kerry said Russia “may well”end up annexing the restive region,and began to focus on steps Mos-cow could take to slow the process.
The mood in Washington hadan 11th-hour feel. Mr. Kerryplanned a hasty diplomatic trip toLondon to meet his Russian coun-terpart on Friday—two days beforethe fateful referendum—while theadministration’s warnings took onan even more dire tone.
Mr. Kerry told lawmakers that ifRussia made the wrong decisionsand the West turned to punitivesanctions, things could “get uglyfast” and “in multiple directions.’’
But there was growing interna-tional resignation over the futureof Crimea, which was part of Rus-sia until the 1950s and still hostsRussia’s Black Sea Fleet.
German Chancellor AngelaMerkel, who has led Europe’s re-sponse to Russia’s occupation ofCrimea, and her team have cometo the conclusion that the chanceto roll backMoscow’s interventionhas passed, according to officialsand analysts.
President Barack Obama metthe new Ukrainian PrimeMinisterArseniy Yatsenyuk at the WhiteHouse, saying he hopes those be-
PleaseturntopageA10
BY CAROL E. LEEAND JAY SOLOMON
ScrambleToEaseUkraineCrisis
LONDON—One of the firstthings Mark Carney did when hetook over the Bank of Englandlast July was to remove a paint-ing of Montagu Norman from awall near his office. Mr. Normanwas the eccentric BOE governorwhose policies are often blamedfor exacerbating the Great De-pression—mistakes Mr. Carneydidn’t want to repeat.
In Mr. Carney’s eight tumultu-ous months at the helm, duringwhich the central bank bungledits economic forecasts and gotdragged into a foreign-exchangeprobe, the United Kingdom hasenjoyed a surprising economic
revival. Now, looming decisionsabout when to increase interestrates are shaping up as his mostimportant test, and a criticalcase study for the U.S. and otherdeveloped economies.
The U.K., U.S., Europe and Ja-pan have held interest rates atrecord lows since the financialcrisis in an effort to encouragelending, energize growth andbring down unemployment. Astheir economies recover, all mustdecide when to declare victoryand let borrowing costs rise.
All want to hold off as long aspossible, but getting a messageacross about how long has be-come complicated. If growth andhiring live up to expectations,
PleaseturntopageA12
BY JASON DOUGLASAND JON HILSENRATH
‘EXPERIMENTAL PHASE’
From London, a Test CaseFor World’s Central Bankers
Sources: U.K. Office of National Statistics;U.S. Labor Dept.
The Wall Street Journal
Job DriveU.K. and U.S. unemployment rateshave fallen more quickly of latethan central banks anticipated.
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0
2
4
6
8
%
’08 ’09 ’10 ’11 ’12 ’13 ’142007
U.K.: 7.2%December
U.S.: 6.7%February
Gas Suspected in Deadly Blast That Leveled New York Buildings
COLLAPSE: Three women died, more than two dozen people were injured and others were missing after an explosion Wednesday destroyed two buildings. A2
Justin
Heiman/G
etty
Images
Canadians Gone Wild: Critter TallyBrings Out Their Competitive Side
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Volunteers Vie to Count the Most AnimalsFor Bragging Rights, Fish Measuring Tape
FORT ST. JOHN, British Co-lumbia—It’s not always easy tospot an ungainly ungulate in thedead of winter, even in the re-mote back country along theAlaska Highway where roadsigns routinely warn drivers ofmoose crossing and the only lo-cally owned and operated radiostation isproudly knownas Moose FM.
That is thechallenge for ahardy brace ofoutdoor enthu-siasts who taketo their snow-mobiles andsnowshoes fortwo days eachwinter to produce a tally of ev-ery critter in the nearbystretches of the Peace River val-ley, from squirrels and foxes toelk and bull moose.
What makes the count in this
former trading post unusual:unlike most wildlife counts forlarger mammals in North Amer-ica, it relies on roughly a coupleof dozen volunteer “citizen sci-entists” instead of professionalbiologists. The official sloganfor the event: “Take a walk onthe wild side—and count them!”
Hard-core participants com-pete fiercely to spot the most
animals in thecontest, whichis sponsored bythe forestryarm of BritishColumbia, Can-ada’s western-most province.In addition tovying for brag-ging rights,they are en-
tered in a drawing for prizessuch as fish measuring tapekits, hand warmers and snarewire, supplied by local mer-chants.
PleaseturntopageA12
BY CHESTER DAWSON
Western Canadian moose
The U.S. could suffer a coast-to-coast blackout if saboteursknocked out just nine of thecountry’s 55,000 electric-trans-mission substations on a scorch-ing summer day, according to apreviously unreported federalanalysis.
The study by the Federal En-ergy Regulatory Commissionconcluded that coordinated at-tacks in each of the nation’sthree separate electric systemscould cause the entire powernetwork to collapse, people fa-miliar with the research said.
A small number of the coun-try’s substations play an outsizerole in keeping power flowingacross large regions. The FERCanalysis indicates that knockingout nine of those key substationscould plunge the country intodarkness for weeks, if notmonths.
“This would be an event ofunprecedented proportions,”said Ross Baldick, a professor ofelectrical engineering at the Uni-versity of Texas at Austin.
No federal rules require utili-ties to protect vital substationsexcept those at nuclear powerplants. Regulators recently saidthey would consider imposingsecurity standards.
FERC last year used softwareto model the electric system’sperformance under the stress oflosing important substations.The substations use large powertransformers to boost the volt-age of electricity so it can movelong distances and then to re-duce the voltage to a usable levelas the electricity nears homesand businesses.
The agency’s so-called power-flow analysis found that differentsets of nine big substations pro-duced similar results. The WallStreet Journal isn’t publishingthe list of 30 critical substationsstudied by FERC. The commis-sion declined to discuss the anal-ysis or to release its contents.
Some federal officials said theconclusions might overstate the
PleaseturntopageA6
BY REBECCA SMITH
Nation’sPower GridVulnerableTo Sabotage
Germany’s Merkel digs in forlong-term conflict...................... A10
EU slows Russian pipelines... A10 Heard on the Street.................. C10
U.S. investigators suspect thatMalaysia Airlines Flight 370 stayedin the air for about four hours pastthe time it reached its last con-firmed location, according to twopeople familiar with the details,raising the possibility that theplane could have flown on for hun-dreds of additional miles under
conditions that remain murky.The investigators believe the
plane flew for a total of five hoursbased on data automatically down-loaded and sent to the groundfrom the Boeing Co. 777’s enginesas part of a routine maintenanceand monitoring program.
That raises a host of new ques-tions and possibilities about whathappened aboard the widebody jet
carrying 239 people, which van-ished from civilian air-traffic con-trol radar over the weekend, aboutone hour into a flight to Beijingfrom Kuala Lumpur.
Six days after the mysteriousdisappearance prompted a massiveinternational air and water searchthat so far hasn’t produced any re-sults, the investigation appears tobe broadening in scope.
U.S. counterterrorism officialsare pursuing the possibility that apilot or someone else on board theplane may have diverted it towardan undisclosed location after inten-tionally turning off the jetliner’stransponders to avoid radar detec-tion, according to one persontracking the probe.
The investigation remains fluid,and it isn’t clear whether investi-
gators have evidence indicatingpossible terrorism or espionage. Sofar, U.S. national security officialshave said that nothing specificallypoints toward terrorism, thoughthey haven’t ruled it out.
But the huge uncertainty aboutwhere the plane was headed, andwhy it continued flying so longwithout working transponders, has
PleaseturntopageA8
BY ANDY PASZTOR
Missing Airplane Flew On for HoursEngineDataSuggestMalaysiaFlightWasAirborneLongAfterRadarDisappearance,U.S. Investigators Say
Copyright © 2013, Oracle and/or its affiliates. All rights reserved.
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P2JW072000-5-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
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