The Wall Street Journal: Monday, August 19, 2013

Manufacturers Gain Ground (page A1): After more than a decade of losing ground to China and other export powerhouses, U.S. manufacturers are finally showing signs of regaining their competitive edge. The U.S. deficit on trade of manufactured goods in this year’s first half shrank to $225 billion from $227 billion a year earlier, according to data compiled by Ernest Preeg, an economist and trade expert at the Manufacturers Alliance for Productivity and Innovation, an industry-funded research group in Arlington, Va. The improvement, while slight, came after years of ballooning deficits as the U.S. lost manufacturing business to China, South Korea and other nations. The Boston Consulting Group—a leading proponent of the idea that U.S. manufacturing will come roaring back—predicts a surge in U.S. exports, partly helped by lower energy costs and stagnating wages. In a report for release Tuesday, BCG says rising exports and “reshoring” of production to the U.S. from China “could create 2.5 million to five million American factory and service jobs associated with increased manufacturing” by 2020. That, BCG says, could reduce the unemployment rate, currently 7.4%, by as much as two to three percentage points. The U.S. has lost much ground over the past 15 years, largely because of China’s surging growth and focus on exports. The U.S. accounted for 11% of global exports of manufactured goods in 2011, down from 19% in 2000, Mr. Preeg said. During the same period, China’s share rocketed to nearly 21% from 7%, and the European Union slipped to 20% from 22%.

To Liven Up Its Season, Baseball Team Pitches a Funeral (page A1): The IronPigs draw 9,000 per game, among the best in the minors, thanks in part to a steady stream of outside-the-box ideas that keep fans engaged. “My job is producing 17 Broadway shows,” says general manager Kurt Landes, referring to the number of breaks in a nine-inning game. Instead of watching the game, he patrols his stadium with an earpiece, chats with fans, directs charges and scoops up loose trash. Mr. Landes, 40 years old, has installed motion-sensor videogames atop some urinals—men score points by hitting penguins with a snowmobile—dressed players in tuxes and Santa Claus suits, an essay contest to win a funeral, and sent a dog-riding monkey galloping around the field. He dreams of hosting a birth at the ballpark (inside team offices) and showing the new baby on the scoreboard at the end of the game.

Cheering for Teams That Don’t Sell Stadium Names (page A17): What’s the new status symbol in professional sports? Being able to name your own stadium. When the Dallas Cowboys open their season at home on Sept. 8 against the New York Giants, they’ll play not at Cowboys Stadium but at AT&T Stadium. Last month, the Cowboys became the latest storied franchise to sell naming rights (in Dallas’s case, for an estimated $19 million per year), leaving even fewer professional teams in the U.S. maintaining their traditional venue names. Unsponsored Yankee Stadium and Madison Square Garden in New York, and Soldier Field in Chicago, are part of a rapidly shrinking group. Their venue names send a message that seems to grow in volume with every “AT&T Stadium”—a message that says, “We are big enough, good enough, and rich enough that we don’t need no stinkin’ naming-rights deal.”

Cyberattacks Get Physical (page B4): Vulnerable computer systems have exposed companies to a host of legal and reputational risks. But as companies work to limit their vulnerability to cyberattacks, many may be overlooking an obvious weak spot: the front door. While the threat of a hacker cracking the company firewall is real, cybersecurity experts say a would-be thief is just as likely to gain access to company data by persuading an employee to hold open a locked office door. “People will put their finger on a biometric fingerprint reader, but they’re still willing to hold the door open for the guy behind them,” says Dan Berger, president and chief executive of Redspin Inc., a cybersecurity firm. Physical intrusion is a threat companies have to guard against as U.S. regulators step up efforts to make companies guard against and possibly disclose attacks on their computer systems. Regulators are particularly concerned about the risk to banks, which have spent millions of dollars defending their computer systems. Companies tend to be more focused on viruses and malware than on physical threats, Mr. Berger says. To shift corporate attention to the problem, companies such as his Carpinteria, Calif., firm deploy tactics out of a spy novel: pretext phone calls, fake identities and covert surveillance. Cybersecurity experts have long highlighted the risk that a company’s employees pose to security. Hackers frequently employ so-called social-engineering attacks, preying on people’s trusting nature to gain access to company data. The Ponemon Institute, a data-privacy and cybersecurity research firm, found in a study last year that 38% of companies had experienced a social-engineering attack.

Stocks Are Splitting from the Herd (page C1): The lost art of picking stocks is enjoying a renaissance. Shares are moving less in tandem with the overall market than at any time since the financial crisis, by some measures. That suggests that investors are zeroing in on the prospects for individual companies rather than making wide bets on stocks as a whole. That behavior marks a departure from recent years, when central-bank stimulus and worries about continued global financial gyrations caused many stocks and bonds to move in concert. Investors would buy when they felt optimistic and sell when they became worried, a phenomenon that caused what became known as “risk on, risk off” moves in the market.

Journal Report on Small Business (section D):



The Wall Street Journal: Saturday, August 17, 2013

Teachers Face License Loss (page A4): Many states have begun to link teachers’ pay to their effectiveness in the classroom. On Friday, Tennessee joined a handful that are taking the idea further: pull the license of teachers whose students consistently fail to improve. “This is not about taking away teacher licenses, but about making sure our students have the best classroom teachers,” said Kevin Huffman, the state’s education commissioner. Over the past three years, many states have started linking teacher evaluations to test-score improvements and other measures of student performance. But only Rhode Island, Louisiana and Delaware have tied some teaching-license renewals to these evaluations, according to Sandi Jacobs of the National Council on Teacher Quality, a research and advocacy group that supports grading teachers on classroom effectiveness. In many states, teachers renew their licenses after completing a number of professional development course-credit hours, or by earning a master’s degree. But research has shown that, for the most part, neither boosts teacher effectiveness as measured by growth in student achievement, said Jane Hannaway, director of the National Center for Analysis of Longitudinal Data in Education Research, a federally funded nonpartisan research center. Under the new policy in Tennessee, teachers must show they are boosting student achievement or they would lose their teaching license. For a third of K-12 educators, the measuring stick would be the standardized state exams given to students. The remaining teachers, such as those in art or physical education, would be judged on other measures, such as portfolios of student work.

What We Lose If We Give Up Privacy (page A13): What is privacy? Why should we want to hold onto it? Why is it important, necessary, precious? Is it just some prissy relic of the pretechnological past? We talk about this now because of Edward Snowden, the National Security Agency revelations, and new fears that we are operating, all of us, within what has become or is becoming a massive surveillance state. They log your calls here, they can listen in, they can read your emails. They keep the data in mammoth machines that contain a huge collection of information about you and yours. This of course is in pursuit of a laudable goal, security in the age of terror. Is it excessive? It certainly appears to be. Does that matter? Yes. Among other reasons: The end of the expectation that citizens’ communications are and will remain private will probably change us as a people, and a country.

The Match That Changed the Game Forever (page A14): There’s no mystery why the U.S. Golf Association chose The Country Club in Brookline, Mass., as the venue for this week’s U.S. Amateur. That’s where Francis Ouimet, an unheralded 20-year-old amateur, won the U.S. Open 100 years ago next month. Somewhat inconveniently, Friday’s amateur action left four players standing, none from the U.S. (two from Australia, one each from England and Canada). But Ouimet’s victory, only the second by an American in America’s own championship, became a legend almost before his final putt—on the 18th hole of a playoff against the two leading British professionals of the day—found the bottom of the cup. Some people and events in sports have had transformative impact far beyond the action on the field. Jackie Robinson’s first season in baseball. The televised 1958 NFL championship game, in which the Baltimore Colts behind Johnny Unitas beat the New York Giants. That game set pro football on the path to becoming America’s favorite living room sport. Ouimet’s victory at Brookline similarly introduced golf to the American mass market, in an era before even radio. “Ouimet World’s Golf Champion,” trumpeted the New York Times in one of at least eight stories it ran about the playoff by the next day. “Remarkable Golf Feat,” the sub-headlines scrolled on. “Splendid Display of Nerve…Big Gallery Makes Demonstration at Finish.” Golf wasn’t even that popular in 1913. The U.S. had only 300,000 to 400,000 players, most of them new because golf itself was still relatively new here. Bobby Jones later recalled that reading about Ouimet’s victory, in Atlanta where he lived, was the first time he’d ever seen the game covered in a newspaper. Within a decade, more than 2 million were playing the game. Ouimet’s triumph is remebered today, largely from Mark Frost’s masterful retelling in his 2002 book, “The Greatest Game Ever Played.” But it’s striking how quickly the newspapers of the day metamorphosed what was, after all, just a few good rounds by a talented amateur, into a nationally celebrated civic event. The themes were irresistible. First were the two men Ouimet beat in the playoff, Harry Vardon and Ted Ray. They were on a barnstorming tour of the States, to show the upstart Yanks what real golf looked like. In fact, the U.S. Open had been postponed to September from June to accommodate their schedule, with the assumption that one or the other would win. Vardon, 43 years old, was considered the best golfer in the world. He was a five-time British Open champion (he would later win another) and was said to have won 14 tournaments in a row in Europe. Ray, 36, had won the previous year’s British Open. To an America still insecure about its place in the world, the triumph of a humble immigrant’s son over golf’s reigning British overlords was magnificent comeuppance.

Friday’s Markets: Worries on Fed Move Pound Stocks, Bonds (page B4): U.S. stocks declined Friday, with a late-day selloff sending the Dow average to its biggest weekly slide in more than a year. The Dow Jones Industrial Average fell 30.72 points, or 0.2%, to 15081.47, reversing gains in the last half-hour of the session. The move followed steeper declines earlier in the week, adding up to a 2.2% drop for the benchmark, the biggest since June 2012. The S&P 500 dropped 5.49 points, or 0.3%, to 1655.83. The Nasdaq Composite Index ticked down 3.34 points, or 0.1%, to 3602.78.

Stocks Test Technical Level (page B4): Here we go again. After big back-to-back declines, the S&P 500 on Friday finished below its 50-day moving average—a key technical level. The stock index ended little changed, but how it reacts around this support area could have broad implications for the rally in the days and weeks ahead. The 50-day average has previously acted as a key gauge for the market’s near-term trend. The S&P 500 pulled back to this level six prior times this year. In all but one, it proved to be a buying opportunity as the market immediately bounced back. The S&P 500 fell 5.49 points, or 0.3%, to 1655.83 on Friday. The 50-day moving average sits at 1657.39, according to FactSet. But now, some technical analysts are warning about tougher times ahead.

‘Bye’ to Uncle Sam? (page B7): Here is a sign that life is getting complicated for U.S. taxpayers with assets abroad: More of them are deciding they are better off cutting official ties with America. In the first half of 2013, 1,809 people renounced their American citizenship or permanent-resident status, according to a tally by Andrew Mitchel, a tax lawyer who tracks U.S. data. At that pace, the 2013 total would double the previous high of 1,781 renunciations in 2011. Daniel Kuettel, a Colorado native who lives near Zurich, says he gave up his U.S. citizenship in October because he feared he wouldn’t be able to get a mortgage now that some Swiss banks are cutting ties with American clients. “It was a really difficult decision. I had to think about what was best for me and my family, to reduce the risk,” says Mr. Kuettel, a 41-year-old software developer. He says his income was below the limit the U.S. allows overseas taxpayers to exempt and he owed no U.S. taxes. The increase in renunciations is one sign that ordinary Americans who have lived and worked abroad for years, as well as green-card holders in the U.S. and overseas, believe they are at growing risk because of the intensifying government pursuit of undeclared foreign assets.

Price-to-Earnings Ratio Aren’t Always What They Seem (page B7): “The stock market is overvalued.” “The stock market is undervalued.” Which one of these statements is true? Both are, thanks to quirks of the most popular way of measuring a stock’s valuation: the price/earnings ratio. While no one disagrees about what the “P” is when calculating the ratio, there is no consensus on how to define earnings-per-share. One of the biggest points of dispute: whether to use analysts’ earnings estimates for the coming year or reported company earnings from the previous 12 months. Comparing ratios calculated in these two ways is little better than comparing apples to oranges, according to Cliff Asness, managing partner at AQR Capital Management, an investment firm with $84 billion of assets under management. In an email, he went so far as to say that those who compare P/Es in this way are engaging in a “sleight of hand,” though he allowed that many may “not be aware of the mistake they are making.” Consider the S&P 500’s current P/E based on trailing earnings. For the four quarters through June 30, the index’s earnings per share amounted to $91.13, according to S&P Dow Jones Indices. That translates into a P/E ratio of 18.2, which is higher than 79% of comparable readings since 1871, according to a database maintained by Yale University professor Robert Shiller. Many bulls try to wriggle out from this bearish sign by focusing on estimated earnings. According to FactSet Data Systems, the consensus forecast from Wall Street analysts is that earnings from companies in the S&P 500 will be $122.01 a share next year, which translates into a P/E ratio of 13.6. That is 6% less than the 14.5 median of historical P/Es in Mr. Shiller’s database.

Annuities Call for Caution (page B8): Conservative savers are flocking to an insurance product with a controversial past: fixed indexed annuities. For investors seeking steady retirement income—typically drawn to products such as certificates of deposit and safe-haven bonds—these annuities can make sense. But be aware: They are complex, and they vary in quality and security. Fixed annuities are a type of savings contract with a tax-deferred interest component. “Indexed” versions link the annual interest to a stock-market benchmark, most commonly the S&P 500. Insurers promise to protect buyers against market losses but cap the upside gain they pay. They also typically exclude dividends from the calculation of payouts. Some buyers have been lured by the stock-market rally, which has sent the S&P 500 up 16% this year. Low interest rates, meanwhile, have cut the appeal of traditional annuities. The rap on indexed annuities is that consumers could overestimate the upside. While the stock-market link is part of the pitch, the product is more like a juiced-up bank CD. Insurers back the contracts mostly with bonds, and use options on market indexes to boost returns. Many contracts sold recently capped the annual upside at about 4% to 5%, according to advisers.

Still Hope for Bond Funds (page B9): Many investors are fleeing bond funds. Those who have stuck around this long might be better off staying put. Investors yanked more money out of bond funds in June than they put in, removing $68 billion—the first monthly net outflow in nearly two years, according to investment researcher Morningstar. They took out another $8 billion in July. Sharply rising yields have pushed down prices, which move in the opposite direction, spurring the exodus amid signs of an improving economy and speculation the Federal Reserve will soon shrink its bond-buying stimulus program. Nervous municipal-bond investors still are weighing the fallout from Detroit’s July bankruptcy filing. The yield on 10-year Treasurys climbed from below 1.7% in early May to above 2.8% Friday. Investors who got out before rates spiked and prices dropped likely dodged some losses. But not everyone is bailing. Before giving up, bond investors should consider that rates could well go back down. Furthermore, bonds offer protection to long-term investors by diversifying a portfolio.

Value Seen in Europe (page B9): With rising rates looming over U.S. Treasurys, now might be a good time for bond investors to go bargain hunting in Europe, financial advisers say. Since May, Federal Reserve officials have indicated that they might begin to scale back the central bank’s huge bond-buying program. That has caused Treasury yields to soar and prices to drop. However, European leaders are leaning in the opposite direction. Just this month, Mario Draghi, head of the European Central Bank, said that rates in the euro zone are likely to stay at historically low levels for the foreseeable future. That means European bonds don’t face the same risk of rising rates as Treasurys, says John Sajdak, head of fixed income at Chicago-based MainStreet Advisors, which manages $2 billion. “With no immediate threat of inflation and slow economic growth in Europe, investors don’t need to be as worried about a big surge in yields,” he says.

In Defense of Football (page C1): It’s a rough, sometimes dangerous sport, but critics exaggerate football’s risks, writes Max Boot—and fail to see what America’s beloved game contributes to the lives of young players and their communities.

Our Unique Obsession With Rover and Fluffy (page C2): Recently, an almost literal case of lifeboat ethics occurred. On Aug. 4, Graham and Sheryl Anley, while yachting off the coast of South Africa, hit a reef, capsizing their boat. As the boat threatened to sink and they scrambled to get off, Sheryl’s safety line snagged on something, trapping her there. Instead of freeing his wife and getting her to shore, Graham grabbed Rosie, their Jack Russell terrier. (One media account reported that Sheryl had insisted that the dog go first). With Rosie safe and sound, Graham returned for Sheryl. All are doing fine. It’s a great story, but it doesn’t strike me as especially newsworthy. News is supposed to be about something fairly unique, and recent research suggests that, in the right circumstances, lots of people also would have grabbed their Rosie first. We have strange relationships with our pets, something examined in a wonderful book by the psychologist Hal Herzog, “Some We Love, Some We Hate, Some We Eat: Why It’s So Hard to Think Straight About Animals.” We lavish our pets with adoration and better health care than billions of people receive. We speak to pets with the same high-pitched voices that we use for babies (though when addressing pets, we typically don’t repeat and emphasize key words as we do with babies, in the hope of boosting their language acquisition). As a grotesque example of our feelings about pets, the Nazis had strict laws that guaranteed the humane treatment of the pets of Jews being shipped to death camps. A recent paper by Richard Topolski at George Regents University and colleagues, published in the journal Anthrozoös, demonstrates this human involvement with pets to a startling extent. Participants in the study were told a hypothetical scenario in which a bus is hurtling out of control, bearing down on a dog and a human. Which do you save? With responses from more than 500 people, the answer was that it depended: What kind of human and what kind of dog? Everyone would save a sibling, grandparent or close friend rather than a strange dog. But when people considered their own dog versus people less connected with them—a distant cousin or a hometown stranger—votes in favor of saving the dog came rolling in. And an astonishing 40% of respondents, including 46% of women, voted to save their dog over a foreign tourist. This makes Parisians’ treatment of American tourists look good in comparison.

Whatever Happened to August? (page C3): It’s the month when the summer nights have a consistent, delicious crispness to them unknown at any other time of the year. It’s when the corn is sweet, the plums are purple and pungent, the baseball pennant races are mature, the ocean temperatures are warm. It is the very best month of the year. And we have ruined it. Not so long ago—well within the memory of half the American population—August was the vacation month. It was a time, much anticipated and much appreciated, of leisure, languor, lassitude and lingering at the beach well into suppertime. Unlike July, it had no holiday disruption, no grocery-store rush, no rituals, no reason to hurry, except maybe to get to the ice-cream stand before closing time, and even that was flexible, depending upon the length of the line. Hardly anyone got married, and no one went to class. Congress barely met, and then it departed for most of the month, a great relief to them and an even bigger one for the nation. It was an idyll of idleness, a time of pure ease—and now it’s gone. We’ve made August a horror of back-to-school and blinding activity, a time when offices are open late and summer camps close early. August it is now no more special than June (part work and school, part holiday season), without Flag Day or Bunker Hill Day, or a sunburned version of March, without much threat of snow. What we’ve done to August has made it the cruelest month: infuriating work and inescapable school obligations amid intoxicating weather. Summer is a lot shorter than it used to be.

The Bad-Boy Entrepreneur (page C4): What does it take to be a successful entrepreneur? The signs are obvious in future moguls’ teenage years: brains, confidence—and illicit activities. Those are the surprising findings of a new working paper by economists at the University of California at Berkeley and the London School of Economics. The researchers argue that merely being self-employed isn’t a particularly good indicator of entrepreneurship, in the sense of taking big risks and mobilizing capital to create new goods and services. As the Harvard economist Edward Glaeser has observed, lumping the self-employed into a single category makes “little distinction between Michael Bloomberg and a hot-dog vendor.” But things looked very different when the professors sorted the self-employed into those who were incorporated and those who were not, with the researchers regarding the former as the genuine entrepreneurs. While the self-employed in general earned less than the salaried, the incorporated made more money and were more likely to make a killing. Relying on the 1973 National Longitudinal Survey of Youth and data from the Current Population Survey, the economists found that those who incorporated had higher aptitude-test scores as teens. As teens, they also engaged in more rule-breaking activities, including stealing, using marijuana and alcohol, drug dealing, violence and gambling. Indeed, their index of illicit activities was almost three times that of teens who went on to become salaried workers. Despite these dubious youthful pursuits, the incorporated tended to come from stable, well-educated families with high incomes in 1979. These entrepreneurs were much more likely to be white, male and well-educated than were salaried workers or the unincorporated self-employed. In other words, incorporated entrepreneurs may be likelier to cross home plate with the winning run, but they’re also likelier to have been born on third base.

Dan Ariely: Ask Ariely (page C12): The behavioral economist answers readers’ questions on losing weight, society’s attitude toward exercise and smoking.

  • the secret weapon of European dieters
  • exercise as a good excuse to escape work
  • employer incentives to quit smoking


The Wall Street Journal: Friday, August 16, 2013

Stocks’ Surge Showing Cracks (page A1): The Dow Jones Industrial Average on Thursday suffered its worst decline since June, as fears intensified that the Federal Reserve will reduce its stimulus in the fall, potentially eroding a key element in this year’s stock-market advance. The Dow tumbled 225.47 points, or 1.5%, to 15112.19. It was the second consecutive triple-digit decline, following a 113-point pullback Wednesday. After being up as much as 19.5% for 2013 on Aug. 2, the Dow now is up 15.3% this year. The big news hurting stocks was a seemingly positive report: New weekly unemployment claims were the lowest since 2007, the latest in a series of indications the job market is improving. But that reinforced fears that the Fed will decide as soon as September that the economy is strong enough for it to begin reducing its $85 billion in monthly bond purchases designed to stimulate the economy.

Rising Stars of the Little Screen Learn to Cope with Fans, Fame (page A1): To make it in Hollywood, it helps to appeal to the masses. To make it on YouTube, it helps to appeal to everyone else. Thousands of YouTube “creators”—many coming to fame through very niche talents or fan bases—filled the Anaheim Convention Center this month for the fourth annual VidCon conference. VidCon has grown from 1,500 people in 2010 to a crowd of 11,000 that believes it is possible to “make it” without leaving Google Inc.’s YouTube for a mainstream movie or television deal, said VidCon co-founder John Green.

U.S. Inflation Moves Closer to Fed’s Target (page A2): Consumer prices rose broadly in July and the number of Americans filing new claims for jobless benefits fell to a six-year low, developments that could comfort Federal Reserve officials as they consider dialing back their bond purchases. The consumer-price index, which measures what Americans pay for everything from bread to medical care, rose 0.2% in July, the Labor Department said Thursday. Core prices, which strip out volatile food and energy costs, rose at the same rate. From a year earlier, overall consumer prices were 2% higher in July while core prices rose 1.7% year over year. The latest price increases were modest, but they reinforced views that inflation may be stabilizing and could dampen fears inside the Fed about inflation falling from already low levels.

Three States Get Warning about ‘No Child’ Waivers (page A2): The Education Department said Thursday that three of 40 states granted waivers from the No Child Left Behind law were at high risk of losing them, because they either have been slow to link teacher evaluations with student achievement or had adopted programs that didn’t meet federal guidelines. If they fail to comply with federal requirements by May, Kansas, Oregon and Washington state face losing their waivers from the George W. Bush-era law, which could entail a loss of autonomy over some funding decisions and changes in how school districts’ performance is judged. The Education Department granted all three states approval to continue their waiver programs for the 2013-2014 school year and asked each to submit a plan of recourse within the next month.

Philadelphia Schools Get Lifeline (page A2): Philadelphia public schools will open on time next month, city officials announced Thursday, saying they would direct $50 million to the struggling district to help close a budget hole. The cash infusion would allow Superintendent William Hite Jr. to rehire 1,000 counselors, assistant principals, aides and others who were among 4,100 employees laid off this year as part of budget cuts amid a $304-million deficit. Mr. Hite had said that if he didn’t receive funds by Friday, the district wouldn’t be able to open all its schools on Sept. 9. But questions remained over the finances of the 136,000-student district as Mayor Michael Nutter and the head of the city council offered conflicting plans Thursday on where the $50 million would come from.

Disney Tries Anew to Raise Its Score on Digital Games (page B1): Walt Disney Co. is rallying Mickey Mouse, Buzz Lightyear and more of its best-known characters to tackle a formidable challenge: bringing its digital division into the black. Disney’s technophile chief executive, Robert Iger, in 2008 grouped the company’s videogame, online and mobile businesses into a single unit, Disney Interactive. Since then, the division has racked up losses of $1.41 billion as it unsuccessfully chased one fad after another—from racing games to virtual worlds to social-network games. The fallout has included more than 500 layoffs, four closed videogame-production studios, and a raft of canceled projects and diminished ambitions. Enter “Disney Infinity,” a combination videogame and toy line that features characters from classic and new movies and television shows. It is a high-stakes effort to right the Disney digital ship, and it hits stores on Sunday in the U.S. and Tuesday in Europe. People close to the company peg the cost of making the game and toys at well over $100 million—similar to a major film production. With “Infinity,” players can create their own Disney-inspired landscapes and game levels in a mode called “toybox.” They can also bring characters, such as the tow truck Mater from “Cars” and Jack Sparrow from “Pirates of the Caribbean,” into the game by buying $13 figurines and placing them on a special scanner.

H&M Gives Ethiopia a Spin (page B2): H&M Hennes & Mauritz AB is looking to Ethiopia as a new low-cost country in which it will produce clothing, as the apparel retailer races to keep shelves stocked at a growing number of stores world-wide. The Swedish company relies heavily on Bangladesh for clothes production, and a move to Africa would expand its sourcing footprint but not replace its commitment to production in Asia. One supplier says H&M is looking to source one million garments a month from Ethiopia.

Infant Dies After Eating Soap Packet (page B3): An infant in central Florida died last week after accidentally eating a packet of concentrated laundry detergent, the state’s Department of Children and Families said Thursday. The death of the 7-month-old boy is believed to be the first associated with single-dose liquid detergent packets, which have been involved in a rash of unintentional ingestion by babies and toddlers since becoming widely available in the U.S. early last year. It heightens the stakes as consumer-products companies such as Procter & Gamble Co. try to stop the problem by modifying their packaging and warning consumers.

Facebook Tests Payments Tool (page B4): Facebook Inc. is testing a way to make it easier for its users to make purchases through retailers’ mobile apps. The new service will give consumers an option to prefill their payment information stored on Facebook with the mobile apps of retailers that partner with the social network. Facebook, however, underscored that it won’t process the payments nor compete directly with digital-payments processors such as eBay Inc.’s PayPal. “We continue to have a great relationship with our payment processing partners, and this product is simply to test how we can help apps provide a simpler commerce experience,” a Facebook spokeswoman said.

Wal-Mart: Where Are All the Hot New Gadgets (page B4): Wal-Mart Stores Inc. has a message for electronics makers: Make more exciting gadgets. The world’s biggest retailer on Thursday blamed its disappointing second-quarter sales results in part on the failure of device makers to churn out more innovative products. “Consumers will spend, but you have to give them a good reason to spend,” Chief Financial Officer Charles Holley said. A lack of refreshed products—from televisions to videogame systems—is a problem for Wal-Mart. Entertainment accounts for 11% of its $274.5 billion in U.S. net sales.

With Gmail Overhaul, Not All Mail Is Equal (page B5): For some retailers that rely on emailed promotions, Google Inc. is adding insult to injury. When the search giant overhauled its free email service three months ago, it set up algorithms to automatically siphon the flow of airfare offers and spa deals away from users’ main inboxes and into an easily bypassed “Promotions” folder. But there is another wrinkle: For Gmail users that do visit those Promotions folders, the first items they see will often be ads sold by Google. The ads are different from those that already appear inside users’ opened messages. Instead, they look like emails sitting in an inbox but are shaded yellow and feature informational “i” icons explaining their purpose. Marketers still complain that the ads threaten to draw attention away from the coupons and pitch emails they want their targets to read first.

Penn State Workers Protest Wellness Plan (page B6): Pennsylvania State University employees are protesting a new wellness program that requires them to provide detailed health information or pay penalties that can total $1,200 a year, in an unusually public backlash against an increasingly common employer practice. Employer wellness programs offering financial carrots and sticks have been growing for years. According to a survey conducted last fall by the National Business Group on Health and Fidelity Investments, 86% of employers were linking incentives to health-related activities this year, up from 57% in 2009. The most common activities were filling out health-risk assessments, getting biometric screenings and participating in smoking-cessation programs. Penn State’s program will charge employees $100 a month starting in January if they—and covered spouses—don’t fill out the health questionnaire and certify that they are having a physical exam. To avoid the penalties, employees also must get biometric screenings, including blood-sugar and cholesterol tests and body-mass index measurements.

Mom-and-Pop Pitches Draw Flak (page C1): Individual investors are pouring tens of billions of dollars into a new generation of complex investment products, and regulators are raising concerns that not all buyers understand the costs and risks. Outside scrutiny is intensifying on securities firms’ sales practices and whether so-called alternative products—ranging from certain types of mutual funds to vehicles that invest in highly indebted companies—are suitable for all of the Americans flocking to them. Some state securities regulators are focusing their examinations on alternative-product brokers, while officials at Wall Street’s self-funded watchdog, the Financial Industry Regulatory Authority, say they are planning to file civil enforcement actions by year-end. “With these things, it can be like giving a 6-year-old a circular saw,” said Brad Bennett, Finra’s enforcement chief. Most mom-and-pop investors “don’t understand the risks they’re taking.” Securities firms say the alternative products can add balance to investors’ portfolios and some protection if markets go into free fall, as they did in the financial crisis. The products also give retail investors affordable access to assets that were once exclusive to wealthy investors.

Misplaced Confidence in a Key Indicator (page C1): Unlike being thin or rich, you can be too confident. So when the Thomson Reuters/University of Michigan index of consumer sentiment hit a six-year high of 85.1 in July, the applause wasn’t unanimous. Some fretted it may presage a nasty fall. After all, the previous high came back in the innocent days when most Americans swallowed the pablum about subprime-mortgage woes being “contained.” Stocks would peak several weeks later, while the worst postwar recession was just five months off. Economists polled by Dow Jones Newswires see a further rise in Friday’s preliminary reading of the index for August, to 85.5, which might prove fodder for optimists and worrywarts alike. Confidence certainly can signal complacency. Five of the top seven readings in the history of the series came within a few months of the bursting of the technology bubble. All of the top 35 readings came between then-Federal Reserve Chairman Alan Greenspan’s “Irrational Exuberance” speech in December 1996 and the onset of the bear market in 2000. But outstanding historical periods by definition precede worse ones. And investors enjoyed years of heady gains during that period of 3½ years.

New ‘Dawn’ in Exchanges’ War on Hackers (page C3): When prices on some U.S. stocks suddenly zoomed one day last month and others unexpectedly plunged, stock-market officials set out to detect a possible computer glitch or a trading algorithm run amok. But after hastily comparing notes, exchange employees—who were participating in a test of market defenses along with bank technicians, regulators and law-enforcement officials—realized the price swings were the work of hackers wielding rogue computer code generating a torrent of erroneous buy and sell orders. The July 18 drill, called “Quantum Dawn 2,” didn’t affect actual market prices. Even so, it sent exchange officials into a flurry of action and emergency planning. The exercise underscored one of the greatest fears of exchange executives and some policy makers: That a well-funded terrorist organization or a rogue nation could pierce the financial system’s defenses and mount an attack that unleashes waves of trading losses, compromises sensitive financial data or even forces the U.S. stock market to shut down. The simulated attack, organized by the Securities Industry and Financial Markets Association and involving more than 500 people from about 50 firms and government agencies, marked the biggest effort yet by the U.S. securities industry to ward off a coordinated assault on the computer systems that underlie the financial markets.

Upbeat Economic Signals Take Down Bonds (page C4): Bond yields in the U.S. and Europe jumped to multiyear highs Thursday as a brightened outlook for global economic growth sparked a new round of concern that the world’s major central banks soon will pull back on monetary stimulus. With yields going higher again, investors also could continue to cash out of bond funds for fear of further declines in prices, traders said. When yields climb on benchmark bonds, the prices of new bonds become more attractive relative to older ones that pay much lower interest.

Recappers: The New TV Guides (page D1): Every night, legions of bloggers churn out descriptions and critiques of shows, episode by episode, from ‘Breaking Bad’ to ‘Honey Boo Boo.’ The rise of a cottage industry. If a TV series has mustered enough of a following to stay on the air, it has likely attracted scribes that churn out the episodic plot summaries known as recaps. In a reflection of how we devour and digest television now, the number of TV recaps has exploded in recent years. Unlikely outlets from political magazines to local news affiliates are publishing CliffsNotes-style summaries of “Under the Dome” and “Big Brother,” piggybacking on the shows’ popularity and thrusting themselves into competition with established entertainment sites and individual bloggers. (The Wall Street Journal’s Speakeasy blog posts recaps of about 10 shows per week, from “Mad Men” to the reality TV spectacle “Here Comes Honey Boo Boo.”) Recaps have emerged as a cornerstone of TV culture in a phase of major transition. For networks, they are indicators of buzz at a time when traditional Nielsen ratings don’t tell the whole story. Though the weekly scrutiny annoys some producers, others monitor recaps to help guide storytelling decisions. Yet the rise of recaps has most to do with the transformation of the TV audience at large. Not only are viewers more inclined to sound off online about the minutiae of their favorite shows, many are also looking for insights about a growing number of serial dramas with complex and sophisticated storytelling. The best recaps serve a dual purpose: guiding fans of a show through subtleties (or entire episodes) they might have missed, and serving as fixed hubs of discussion for readers whose viewing patterns are staggered by time-shifting. There’s also a more basic driver of recap activity: They drum up steady web traffic for the content-hungry sites that host them.

Don’t Shoot! It’s an ‘Empathy Game’ (page D1): Among the many videogames at a recent arts and games festival in Baltimore, none was more difficult to navigate than “That Dragon, Cancer.” The challenge: Getting through it without crying. The game is about war, but not the bullet-blazing variety normally associated with gaming. It’s an autobiographical story that puts players in the role of a father whose 4-year-old son is dying of cancer. As Hannah Armbruster sampled the game, using a mouse to move a pixelated dad around its hospital-room setting, her face showed none of the excited contortions that might accompany “Call of Duty.” She took gulps of sadness and at one point rubbed her forehead in disbelief. When the game was over, she said, “Whoo,” removed her headphones and left the computer. Why would anyone want to put themselves through this? “For the same reason you’d want to read a novel about something really heavy,” says Ms. Armbruster, a 20-year-old college student. “There’s something really satisfying about experiencing narratives that are outside your own experience.” More than four decades after Pong, players are tackling a range of heady subjects including cancer, depression and alcoholism. Instead of pumping adrenaline, these “empathy games” use the videogame form to tell stories that are far more personal than the Hollywood tropes most big budget games still rely on.

How Penn State Football Survived (page D8): To write his forthcoming book “Fourth and Long: The Fight for the Soul of College Football,” author John U. Bacon embedded himself with four Big Ten programs—Penn State, Ohio State, Michigan and Northwestern—in search of the sport’s old ideals as it is roiled by money, greed and scandal. In this excerpt, he offers a behind-the-scenes look at how Penn State’s team reacted to the Jerry Sandusky sex-abuse scandal last year.


The Wall Street Journal: Thursday, August 15, 2013

Europe’s Economy Starts to Grow (page A1): The euro zone’s marathon recession has ended, spurred by solid economic performances in both Germany and France. But the modest recovery won’t go very far in fixing the bloc’s deeper problems and threatens to stoke a sense of complacency in European capitals. The currency bloc’s return to slow growth—confirmed by data published Wednesday that showed its economy grew at a 1.1% annualized rate in the second quarter—is likely to encourage European politicians to claim that the region’s debt crisis is receding. Once-frantic efforts to fix the common currency’s flaws are already showing signs of petering out. Most economists say the recovery is too sluggish to overcome the euro zone’s multiple ailments, including still-rising debts, mass unemployment, hobbled banks and political instability.

Confident Consumers Step Up Their Borrowing (page A1): After years of struggling to shed debt, Americans are finally gaining enough confidence in their finances to step up borrowing for autos, homes and other goods—a shift that could boost the economic recovery. Auto lending increased by $20 billion in the second quarter from the previous quarter, the largest gain in seven years, Federal Reserve Bank of New York figures showed Wednesday. Americans also increased their credit-card balances, reversing a first-quarter decline, and took out more mortgages. At the same time, total consumer debt declined by $78 billion last quarter to $11.15 trillion, putting it 12% lower than its peak in the fall of 2008 during the recession and at its lowest level since 2006. Most of the adjustment was due to a decline in the amount of debt tied to outstanding home loans, likely due to lenders’ write-offs from foreclosures and recent gains in home prices that helped owners sell. The new data showed that Americans, four years into a lethargic economic recovery, are making substantial progress in a long slog of deleveraging—cutting debt that has been weighing down households for years. One exception is student debt. The amount of education loans outstanding has increased every quarter since the New York Fed began tracking the figure in 2003. They now account for almost 9% of all consumer debt, up from 3% a decade ago.

Nurse Practitioners Seek Right to Treat Patients on Their Own (page A3): Nurse practitioners in five states are fighting for the right to treat patients without oversight from doctors, as they can in many parts of the country. The battle is particularly pitched in California, where a bill that would let some nurse practitioners do their work independently passed a key legislative committee this week. California doctors strenuously oppose the idea, arguing that it could jeopardize patient safety. Other nonphysician health professionals around the country also are lobbying to expand their roles, citing the shortage of doctors in some areas and the expected onslaught of millions of patients newly insured under the Affordable Care Act next year. NPs, as nurse practitioners are known, say they are particularly positioned to fill such gaps. Unlike physician assistants, who are licensed to practice under a doctor’s supervision, NPs—who have more training and education than registered nurses—can serve as patients’ primary health providers. NPs are trained to examine, diagnose and treat patients, manage acute and chronic illnesses and can prescribe medications, including controlled substances, in all 50 states.

Government Steps in on College Dispute (page A6): A dispute that erupted last month over an accreditation agency’s proposed shutdown of one of the country’s largest community colleges escalated this week when the Department of Education warned the agency that it wasn’t in compliance with federal guidelines. The Education Department warning, in a letter dated Tuesday, comes at a time when President Barack Obama is calling for major changes in the accountability of the nation’s higher-education accreditation system and has threatened to create an alternative system if the changes aren’t forthcoming. The letter was issued after the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges, which certifies two-year colleges in the western U.S., told the City College of San Francisco on July 3 that the school would lose its accreditation in one year. The agency faulted the school for deficiencies in 14 areas including financial management, library services and student achievement.

When a New Job Leads to a Lawsuit (page B1): More employers are requiring their new workers to sign “noncompete” agreements, which they say are needed to prevent insiders from taking trade secrets, business relationships or customer data to competing firms when they leave. But with a more than 60% rise over the past decade in the number of departing employees who are getting sued by their former bosses for breaching the agreements, some worry these clauses are having an unintended damping effect on U.S. entrepreneurship, by preventing people from leaving the corporate world to launch their own businesses, or hire workers when they do.

A Mentor’s Advice: Stick to One Thing, Not a Bunch (page B4): Startup founders face many hurdles when building their businesses, some more daunting than others. Some startups featured in WSJ’s Startup of the Year documentary struggled to figure out whether their product lineup is right. They also grappled with creating a clear marketing message for their website and when to seek angel-investor funding. The Journal paired the participating startup founders with experienced mentors who could help them identify their priorities. Edited excerpts from three recent video mentoring sessions follow:

Growth by Leaps and Bounds (page B5): Mike Wood had been practicing law for about 11 years when he encountered a challenge that would change his life: teaching his 3-year-old son to read. His son Mat had memorized the letters of the alphabet, but struggled to learn the sounds that the letters represented. Over the next five years, Mr. Wood researched marketing and phonics, a teaching method that focuses on the correlation between letter groupings and sounds, while holding down his partnership at a technology law firm. He decided to take sound chips—like the ones used in singing greeting cards—and put them in plastic toy letters. When a child pushed down on a letter, it would make the sound that the letter represented. Mr. Wood designed a prototype, left his job and set up focus groups with mothers. He then found a buyer at Toys “R” Us Inc. and a manufacturer in China. In 1995, he started LeapFrog Enterprises Inc., an educational toy company. By 2002, LeapFrog had $520 million in annual revenue, and its best-selling product, a hand-held learning device called LeapPad, was in nine million homes. The Emeryville, Calif., company’s stock soared almost 99% after it went public that July, making it the top-performing IPO of the year. Mr. Wood stepped down from LeapFrog in 2004 when he grew tired of managing the company. In 2006, he founded Smarty Ants Inc. of San Rafael, Calif., which makes a cloud-based software program designed to teach kids how to read. Mr. Wood, 60 years old, spoke in an interview about creating and marketing educational toys and dealing with problems overseas. Edited excerpts:

Wednesday’s Markets: Investors Dim the Lights (page C4): U.S. stocks declined broadly Wednesday, amid growing investor caution about the outlook for the rest of the year. The Dow Jones Industrial Average shed 113.35 points, or 0.7%, to 15337.66, its biggest one-day point decline since June 28. The S&P 500-stock index slipped 8.77 points, or 0.5%, to 1685.39, with nine of 10 sectors lower. The technology-heavy Nasdaq Composite Index dipped 15.17 points, or 0.4%, to 3669.27.

Shopping Up A Storm (page D1): The Weather Channel knows the chance for rain in St. Louis on Friday, what the heat index could reach in Santa Fe on Saturday and how humid Baltimore may get on Sunday. It also knows when you’re most likely to buy bug spray. The enterprise is transforming from a cable network viewers flip to during hurricane season into an operation that forecasts consumer behavior by analyzing when, where and how often people check the weather. Last fall the Weather Channel Cos. renamed itself the Weather Co. to reflect the growth of its digital-data business. The Atlanta-based company has amassed more than 75 years’ worth of information: temperatures, dew points, cloud-cover percentages and much more, across North America and elsewhere. The company supplies information for many major smartphone weather apps and has invested in data-crunching algorithms. It uses this analysis to appeal to advertisers who want to fine-tune their pitches to consumers. “People generally check the weather because they’re planning to do something,” says David Kenny, the company’s chairman and chief executive. “We are getting better at knowing the kind of things people will be planning based on where and when they are checking the weather and what the weather is.”


Is That Ice Cream on Your Beer? Japan’s Wacky Summer Brews (page D1): Care for some pineapple juice or fermented milk in your beer? Strange brews are on tap in Japan this summer, as the country’s biggest beer-makers—Asahi Breweries Ltd. and Kirin Brewery Co. —experiment with novelty beers they hope will appeal to younger Japanese drinkers, particularly women, who prefer drinks sweeter than the average pint. The gimmicky concoctions are available mainly at bars and temporary beer gardens the companies have set up for the peak quaffing season in cities across Japan. The drinks are becoming a regular summer feature, a way for Asahi and Kirin to promote and test new-product ideas, the most promising of which can be sold more broadly later.


The Wall Street Journal: Wednesday, August 14, 2013

Companies Spruce Up Neighborhoods, Putting Gentrification in Overdrive (page A1): On a recent weekday morning, a crew was busy sprucing up the exterior of Koonal Parmar’s one-story house in West Oakland. They trimmed trees, pressure-washed the wood siding and touched up his paint job. Mr. Parmar didn’t pay a dime for all this. The upgrades were compliments of REO Homes LLC, an investment firm that owns several houses on Mr. Parmar’s block. In addition to helping homeowners upgrade their homes, REO has mended fences and planted hundreds of trees along city streets. “The neighborhood was badly in need of capital, to maintain, beautify and restore it,” said REO founder Neill Sullivan, while driving his hybrid sedan through the streets of West Oakland. The company’s motives aren’t altruistic. They are part of a broader strategy designed to upgrade the neighborhood to attract higher-income residents who, in turn, will help boost properties’ values. In past housing recoveries, investors purchased foreclosed homes and often tried to flip them for a quick profit. But investors with a different approach have plunged into the housing market this time. They have assembled billions of dollars to acquire homes and upgrade them. Their aim is to gentrify communities and profit later when rents and property values rise.

Newark’s Booker Gets Closer to Senate Seat (page A4): Cory Booker, the mayor of Newark, N.J., and a quickly ascending Democrat on the national stage, won the party’s primary race Tuesday night for U.S. Senate in New Jersey. With most precincts reporting, Mr. Booker had 59% of the vote, topping state Assembly Speaker Sheila Oliver and U.S. Reps. Rush Holt and Frank Pallone. Mr. Pallone captured 20% of the vote, Mr. Holt 17% and Ms. Oliver 4%. Steve Lonegan, a former mayor in Bergen County, N.J., and past director of the state branch of the conservative Americans for Prosperity group, won the Republican primary. Results showed he had 80% of the vote, compared with 20% for Alieta Eck, a physician from Franklin Township. Messrs. Booker and Lonegan will face off in an Oct. 16 special election. The winner will immediately join the Senate once the results are certified. An election for the full, six-year term is to be held in 2014. Mr. Booker is heavily favored to win over Mr. Lonegan. New Jersey has 705,000 more registered Democrats than Republicans, and it hasn’t elected a GOP senator since 1972, when Clifford P. Case won the office.

Wealth Effect Boosts Retailers (page A5): U.S. consumers continued spending steadily in July, signaling shoppers are likely to remain the engine of the economy’s slow but steady expansion in the months ahead. Retail sales climbed a seasonally adjusted 0.2%, the fourth consecutive month of increases, the Commerce Department said Tuesday. The previous month’s gain was revised up to 0.6% from 0.4%, amid brisk demand for cars and furniture. Shoppers are “seeing the value of their homes and retirement accounts go up,” said John Venhuizen, chief executive of Ace Hardware Corp., an Oak Brook, Ill., retailer cooperative with 4,700 stores globally. “That wealth effect is making people feel more comfortable buying higher-priced items like barbecue grills, which increased by double digits in July” from a year earlier, he said. Consumers started the year confronted by higher taxes, surging gasoline prices and the impact of federal budget cuts. However, more than halfway through 2013, they are notching the highest confidence levels in years. Economists attribute the optimism to a gradually improving jobs picture, rising home values and the bull market in stocks.

Icahn Pushes Apple on Buyback (page B1): Investor Carl Icahn has grabbed a stake valued at over $1.5 billion in Apple Inc., believing that more cash should be falling from the tech giant’s branches. Specifically, Mr. Icahn is pressing the company to buy back shares now. While Apple earlier this year announced a large buyback, Mr. Icahn said in an interview Tuesday that he wants to see it happen right away, near the current share price, which he considers cheap. “This is a no-brainer to go buy stock in a company that can go borrow” at a low rate, Mr. Icahn said in an interview. “Buy the company here and even without earnings growth, we think it ought to be worth $625,” he said, referring to the stock price, which closed Tuesday at $489.57, having risen 5% on the news of Mr. Icahn’s investment.

Chinese Job Site Offers 2.5 Million Openings (page B5): Worried about China’s slowing economy? Evan Guo, chief executive officer of Zhaopin Ltd., has more than 2.5 million reasons not to. That’s the number of job opportunities posted on, one of China’s largest recruitment websites. Despite sharply slower growth, the world’s second-largest economy continues to create jobs, he says. Mr. Guo, who previously worked at management consultancy McKinsey & Co. and helmed a state-owned enterprise in China’s logistics sector, sat down with The Wall Street Journal in his Beijing office to discuss the evolution of China’s Internet and why the models you learn at business school don’t work in China. Edited excerpts:

In Asia, Locals Hit Western Ceiling (page B6): As Western multinationals ratchet up their operations in Asia, there is one glaring omission from the upper ranks of management: Asians. Asians are employed by multinationals in greater numbers than ever before at lower levels, but when it comes to the top roles, companies from food to finance tend to pick Westerners. When Western companies first started expanding to Asia, headquarters sent an executive to Asia to show employees how the business should run. Decades later, not much has changed. In part, that’s because leaders tend to promote people in their own image and culture, perpetuating a cycle of white, male bosses, according to consulting and executive-search firms. Many executive-search firms say their clients would leap at the chance to hire locally, but few firms are taking steps to develop and groom talent. “[Multinationals] in Asia often fall into the trap of overrelying on expatriates and headhunters as ‘easy’ ways to quickly fill vacancies,” notes a 2011 study by the Corporate Executive Board, a global business advisory. “But time to productivity is slow for outsiders who lack company or market knowledge.” Having less diversity at the top can be bad for business. Expat executives may lack some of the skills needed on the ground, says Nicklas Jonow, a partner at Pacific Consulting Group, a consulting firm. “For example, understanding consumer needs, trends, purchasing power, brand positioning—not just for luxury brands, and not just in Tier 1 cities—is becoming increasingly important,” he said in an email. “To fill those needs, multinationals have to shift their hiring practices to [local] talent who really understand these markets.”

No Need to Ask Price at Euro Stores (page B8): Taking a page from the popularity of dollar stores in the U.S., consumer-goods manufacturers, retailers and restaurants throughout the euro zone have discovered the power of the round price point and are introducing one-euro products aimed at budget-conscious  hoppers. Unilever, Danone SA, Starbucks Corp. and McDonald’s Corp. in recent months have pushed one-euro products to light a fire under a consumer market in deep recession.

Buyers Tackle a Fear of Debt (page C1): Investors aren’t afraid of the bond market anymore. After a broad selloff in May and June, investors are pouring money back into corporate bonds and riskier types of debt, some with complex structures and favorable terms for issuers. Pension funds, insurance companies, mutual funds and hedge funds are resuming a hunt for higher yields that petered out earlier this spring when the Federal Reserve said it may begin to wind down its $85 billion-a-month bond-buying program, known as quantitative easing.

Student-Loan Load Kills Startup Dreams (page C1): The rising mountain of student debt, recently closing in on $1.2 trillion, is forcing some entrepreneurs to abandon startup dreams and others to radically reshape their business plans. Some academic experts say leftover loans are the biggest impediment to upstart entrepreneurship by those who recently received college or graduate degrees. “I mentor students all the time,” says Vivek Wadhwa, a fellow at Stanford University Law School. “The single largest inhibitor to entrepreneurship is the student loans.”

Audit Report Adds Beef (page C2): Auditors would have to tell investors more about the tough decisions they had to make in evaluating a company’s finances under a new proposal from the government’s audit-industry regulator. The proposal, issued Tuesday by the Public Company Accounting Oversight Board, also would require auditors to evaluate whether the assertions a company makes in its annual report are accurate—a move which would take the auditors beyond their traditional rule of verifying a company’s numbers. Both changes are part of a plan by the PCAOB to overhaul and expand the audit report— the letter in every annual report in which an auditor avers that the company’s financial statements are “fairly presented.” The moves are aimed at making the audit report more useful for investors, as opposed to the current boilerplate letter that critics say tells investors little of substance about a company’s true condition. The PCAOB’s proposal also would add some disclosures to the audit report, notably information about how long the auditor has worked for the company. Many companies have used the same audit firms for decades, and some critics think that can lead to coziness that can jeopardize an auditor’s professional skepticism and ability to conduct a tough audit. “I think we’ve got a better mousetrap,” said PCAOB Chairman James Doty. He called the proposal “a watershed moment for auditing.”

Tuesday’s Markets: Stocks Move To and Fro as Traders Spin Their Wheels (page C4): U.S. stocks edged higher Tuesday, recovering from early losses as a positive economic backdrop and strength in technology stocks helped offset a rise in longer-term Treasury yields. The Dow Jones Industrial Average rose 31.33 points, or 0.2%, to 15451.01. The Dow was down 77.34 points, or 0.5%, at a one-month low early in the session before rebounding. The S&P 500-stock index advanced 4.69 points, or 0.3%, to 1694.16, and the Nasdaq Composite Index added 14.49 points, or 0.4%, to 3684.44.

After Losing Season, Records May Be Safe (page C4): U.S. stocks are facing a formidable obstacle on the road to further records: slowing profit growth.  With 90% of companies in the S&P 500 having reported second-quarter results, firms are on track to post 2.2% earnings growth from the year-ago quarter. That is the second-lowest growth rate since the depths of the financial crisis, and down from previous periods. Earnings among the large U.S. companies tracked by the index rose 3.4% in the first quarter and 5.6% in the fourth quarter of 2012. And the gains from earlier this year have been driven largely by corporate cost cutting and a bounceback by financial companies. Excluding financials, profits are on track to be down 2.9% in the second quarter from last year, according to FactSet. With the S&P 500 up 18.8% so far this year, this slowdown in earnings growth means valuations are heading toward the expensive side of the ledger at a time when the biggest boost from the earnings recovery may be in the rearview mirror. The high valuations, along with the prospect that the Federal Reserve soon will scale back its efforts to support the economy, may make the outlook for earnings more important to investors.

Why People Love to Crunch (page D1): Are you a cruncher? Or a “smoosher”? Some people crave the perfectly crispy crunch of a cracker or a salty chip. Others yearn for the silky smoothness of a chocolate mousse. Food companies are paying closer attention to consumer’s texture preferences as they drill down on attributes that make new products stand out on store shelves. Food developers are putting specific textures at the top of the list of traits they want to achieve, and they are emphasizing “mouth feel” in descriptions on packaging. Texture “is just as important as taste or flavor, in many cases,” says Jack Fortnum, president of the North American business at Ingredion Inc., a Westchester, Ill., food-ingredient processor that holds hundreds of consumer taste tests a year.


Walter Mossberg: So Many Ways to Deliver Online Video to Your TV (page D1): Streaming vs. Beaming vs. Downloading. Watching TV shows, movies and other video via the Internet on your big-screen television has become all the rage. But the proliferation of devices and methods for doing so has made the whole thing mighty confusing. Should you buy a “smart TV” to watch, say, Netflix? Or should you make an older TV “smart” by attaching a box that includes Netflix? Or should you buy an adapter and just beam Netflix wirelessly from your smartphone or tablet? And then, should you stream a movie or download it? Do you have to pay to get TV shows and movies from the Internet, or can you get them for free? There’s no one right answer for everyone, or every situation. To help sort out the choices, here’s a primer for watching Internet video on a TV, legally. This isn’t a review of any one product and it’s aimed at average, non-techie consumers. Techies reading this won’t find some of the more obscure products and methods. I’ve also chosen to omit the oldest, but most complex, method—hooking up a PC to a TV using cables. That’s so 2008. 

Comedic Gold or Clunker? Secrets of Effective Office Humor (page D1): Employers like to hire people with a sense of humor, research shows. And mixing laughter and fun into a company culture can attract skilled workers, according to a study last year in the journal Human Relations. A 2011 study at Pennsylvania State University found that a good laugh activates the same regions of the brain that light up over a fat bonus check. But the office can be a comedic minefield. Making colleagues laugh takes timing, self-confidence—and the ability to rebound from a blooper.

A Tech Device That Nags You to Sit Up Straight (page D3): “Sit up straight. Put your shoulders back. Don’t slouch.” Chances are good that you’ve heard nags like these from your mother more than a few times in your life. This week, I tested a gadget that might give mothers a rest. It’s a $150 sensor called LumoBack, from a company called Lumo BodyTech, that straps around your lower waist to track your posture and vibrates whenever you slouch. It also tracks steps while walking and running, standing time, sitting time, sleep positions and sleep time.

College Athletics Could Die! Or Not (page D6): A lawsuit brought by former and current college athletes is a potentially devastating threat to the NCAA. But an examination of worst-case scenarios finds that most Division I athletic departments would avoid catastrophe.

The Wall Street Journal: Tuesday, August 13, 2013

Gene Breakthroughs Spark a Revolution in Cancer Treatment (page A1): An explosion in knowledge about genetic mutations that cause tumors is offering the promise of narrowly targeted drugs that are much more effective than chemotherapy in treating cancer.

Better Living Through Hacking (page A4): Cash-strapped cities are turning to an unusual source to improve their online services on the cheap: helpful hackers, who use city data to create tools tracking everything from real-time subway delays to where to get a free flu shot near your home and information about a contentious school-closing plan. Hackers have been popularly portrayed as giving fits to national-security officials and credit-card companies, but the term also refers to people who like to write their own computer programs and help solve a variety of problems. Recently, hackers have begun working with cities to find ways of building applications, or apps, that make use of data—which gets stripped of personally identifiable information—that municipalities are collecting anyway in the regular course of governance.

Revenue Surge Thins Deficit (page A6): The U.S. government is posting the strongest revenue since before the recession, buoyed by higher tax rates and a slowly improving economy, leaving the federal budget on track for its narrowest deficit in five years. Revenue from October to July, the first 10 months of the government’s fiscal year, totaled $2.287 trillion, the Treasury Department said Monday. That is up about 14% from a year earlier and about 8.1% from the first 10 months of 2007, the next highest year for revenue. Meanwhile, government spending is down slightly, largely due to across-the-board cuts called the sequester that went into effect March 1. Overall, the government is still spending well more than it collects, albeit at a slower pace. The budget deficit for the 10 months reached $607.42 billion, 38% narrower than a year earlier. For the fiscal year ending Sept. 30, the Congressional Budget Office estimates a deficit of $642 billion, compared with $1.087 trillion a year earlier and the smallest gap since 2008’s $458.55 billion shortfall.

Take Two Photos and Call Me in the Morning (page A15): In studying the history of medicine, physicians honor major turning points in medical technology, such as Laennec’s stethoscope in 1816 and Röntgen’s radiograph X-ray in 1895. What goes unmentioned is that we are enjoying a golden age of palm-size iWonders. My own smartphone is stocked with apps that include complex pediatric dosing, advanced life-support algorithms for optimal resuscitation and specialized textbooks for late-night reading. Now there is even an app that lets doctors transform their cellphones into ultrasound machines. But the simple camera phone is epochal in that it puts the power—literally—into the hands of patients. The photographic possibilities extend far beyond the skin. In the pediatric gastroenterology clinic, many concerned parents bring in photos of their kids’ dirty diapers, which all parties agree is vastly preferable to bringing in the real thing. Some neurologists recommend that parents make videos of children who have a known history of seizures to help the team fine-tune medication doses. In developmental and behavioral clinics, parents can show videos of their children at home demonstrating milestones like a mature pincer grasp or pulling to stand, even if the kids get shy about showing off their skills to a room full of doctors. With regard to taking photographs or videos of patients, health-care providers are bound by the privacy rules of the Health Insurance Portability and Accountability Act. But parents are free to capture such pictures. Especially in pediatrics, parents are encouraged to be advocates, and phones can be their close allies.

Spy Camera, Secret Audio Used to Fight Movie Piracy (page B1): There are several ideas for how to stem the tide of digital pirates whose circulated copies of movies eat into theatrical and home-video profits for studios. The Motion Picture Association of America has said the movie industry loses billions of dollars in sales to piracy each year, though the exact cost is difficult to estimate. Nationally, the MPAA and the Recording Industry Association of America support a “six strikes” program organized with various Internet service providers that takes an escalating series of legal steps to block Web access for serial pirates. But Verance and a San Diego startup, PirateEye, believe they can combat piracy using vastly different technologies. While Verance’s technology is designed to stop pirated movies from spreading, PirateEye is going directly after the source. It installs cameras above theater screens that can detect recording devices in the audience and then send pictures of offenders to theater security.

Billionaire Inventor Plans High-Speed Transport (page B3): Billionaire inventor Elon Musk unveiled plans Monday for what he has dubbed the Hyperloop, a futuristic solar-powered vehicle that promises to zip people between cities at near sonic speeds. Whether one ever gets built is a separate question. In a first draft of his plan posted online, 42-year-old Mr. Musk outlined how such a high-speed service could work. Unlike traditional trains, the Hyperloop would feature a tube suspended aboveground on top of pylons. Inside the tube, pods with electric compressor fans would move back and forth in a low pressure environment, gliding atop a cushion of air. Mr. Musk said he was interested in building a prototype. In layman’s terms, Mr. Musk has described his designs as equal parts Concorde, rail gun and air hockey table. He estimates a California Hyperloop, which could travel between San Francisco and Los Angeles in 30 minutes, would cost about $6 billion to $10 billion to build.

Audits Getting Audited (page C1): The annual audit report is about to get an extreme makeover. After seven decades in which the auditor’s letter hasn’t changed much, U.S. regulators on Tuesday are expected to propose major new rules requiring auditors to tell investors more about what they find in companies’ books. The Public Company Accounting Oversight Board, the government’s audit-industry regulator, is pushing the accounting industry to disclose more about its views on a company, which some say will make the document attached to each public company’s annual report more useful, albeit a little longer. While the PCAOB hasn’t said specifically what it will propose, having auditors provide their opinions on broader matters appears likely to be the crux of it. Regulators and industry critics say investors need more information from auditors about matters such as whether a company’s accounting is aggressive, and what auditors think are the most important features of a company’s finances.

Monday’s Markets: Stocks Straddle The Line (page C4): The Dow industrials were little changed Monday, while technology shares provided a boost to benchmarks. The Dow Jones Industrial Average hovered around zero, shedding 5.83 points, or less than 0.1%, to 15419.68. The S&P 500-stock index lost 1.95 points, or 0.1%, to 1689.47. The Nasdaq Composite Index, a tech-heavy benchmark, climbed 9.84 points, or 0.3%, to 3669.95.

The Hidden Benefits of Chitchat (page D1): Small talk can be used to signal our friendly intent and to get people to like us. It can lead to more-significant conversations that spark friendships and clinch deals. Still, for many it remains a mysterious and challenging art.

Alcohol and Appetite: Does This Drink Make Me Look Fat? (page D1): It isn’t just the beer that contributes to beer bellies. It could also be the extra calories, fat and unhealthy eating choices that may come with moderate drinking.

“Men and women ate less healthily on days they drank alcohol,” said Rosalind Breslow, an epidemiologist with the federal National Institute on Alcohol Abuse and Alcoholism and lead author of the study. “Poorer food choices on drinking days have public-health implications,” she said. The findings dovetail with controlled lab studies in which participants generally eat more food after consuming alcohol. Researchers suggest that alcohol may enhance “the short-term rewarding effects” of consuming food, according to a 2010 report in the journal Physiology & Behavior that reviewed previous studies on alcohol, appetite and obesity. But other studies have pointed to a different trend. Moderate drinkers gain less weight over time than either heavy drinkers or people who abstain from alcohol, particularly women, this research has shown. Moderate drinking is considered having about two drinks a day for men and one for women.

Induced Labor May Boost a Child’s Risk of Developing Autism (page D2): Pregnant women who have procedures to induce or encourage labor might have an increased risk of bearing a child with autism, according to a new study. Researchers at Duke University and the University of Michigan who conducted the study, published Monday in the journal JAMA Pediatrics, said it doesn’t prove that induced and/or augmented labor causes autism. Instead, it suggests that a link exists between the circumstances surrounding these delivery procedures and autism diagnosis in childhood. The researchers don’t suggest any change in medical practices based on their findings.

Travelers Don’t Have to Leave Home without Their Fitness Routines (page D4 – scroll down): Frequent fliers trying to avoid luggage fees and hassles often leave their exercise gear—and routines—at home. Many hotel chains are trying to help their guests travel light and stay fit by stocking workout gear to borrow. Here are a few offerings from some popular chains:

When the Race Goal Rises from 6 Miles to 26 (page D3): For the record number of American runners who completed an official race event last year, the questions often start not long after they cross the finish line: “What’s my next challenge?” and “How much further can I push myself?” But data show that the bulk of runners are heavily concentrated in shorter races, specifically 5 and 10 kilometers. That could be because many who aspire to race longer distances struggle with how to successfully ramp up training and stay motivated. “Going from 3 miles to 6 miles—a 5k to 10k—that’s logical. Going from 6 miles to 26 miles is a whole different world of stress,” says Tom McGlynn, a three-time Olympic marathon trials qualifier and founder of Runcoach, an online training program for runners. Longer distances require a much different mind-set and approach than shorter ones, he says, with more focus needed on muscle stamina and endurance. Doctors and running coaches advise beginners to transition slowly. Some recommend running regularly at a 5k to 10k level for six months to a year before training for a marathon, while others suggest dedicating one to two years to building a base. All agree—don’t wait too long after a first race to start working on the next one.

Writing on Wall for NCAA (page D6): There is the unmistakable sense that enough has finally become enough, that Johnny Manziel may be a change agent, that inequity in college sports has reached such a comical level that it can no longer be justified with a straight face.

The Wall Street Journal: Monday, August 12, 2013

Emerging World Loses Growth Lead (page A1): Momentum in the global economy is shifting to the developed world, away from the emerging economies that had led growth since the financial crisis. For the first time since mid-2007, the advanced economies, including Japan, the U.S. and Europe, together are contributing more to growth in the $74 trillion global economy than the emerging nations, including China, India and Brazil, according to an estimate by investment firm Bridgewater Associates LP. The turnabout may reshape world capital flows and upend forecasts that corporations had built around ebullient hopes for emerging markets. Among forces driving the shift: a resurgent Japan that for years was a weakling of the global economy. Japan’s economy expanded 2.6% on an annualized basis last quarter, the government reported early Monday, slower than the revised 3.8% first-quarter pace but a meaningful change after years of stagnation. The recovering U.S. economy has produced steady, albeit tepid, growth. And Europe’s economy is estimated to have expanded slightly in the latest quarter after a long recession, new reports this week are expected to show. At the same time, the emerging world’s big guns—such as Brazil, Russia, India and China—are ailing or ratcheting back from their stellar performance of recent years. The International Monetary Fund forecasts the global economy to expand 3.3% this year, compared with 3.2% in 2012 and 4% in 2011.

Analysts See Growth Worthy of a Fed Pullback (page A2): he U.S. economic growth outlook has been upgraded to decent from lousy—which, while some distance from good, is likely good enough for the Federal Reserve to pull back on its stimulus later this year. On the positive side, fears of another downturn are minimal. Economists in the latest Wall Street Journal economic forecasting survey put less than a 15% chance on another recession hitting in the next 12 months. But at the same time, they put only a 13% chance that growth in gross domestic product this year will be stronger than the long-run average of 3.5%.

Adding News to the Shopping Cart (page A13): ournalists these days relish gallows humor, like Andy Borowitz’s satire in the New Yorker, “Amazon Founder Says He Clicked on Washington Post by Mistake.” It’s a reminder of how anxious journalists remain about their industry—a good reason to welcome Mr. Bezos as a new kind of owner. His expertise at Amazon in focusing on consumers and using data to make them happier is just what the news industry needs. It is well known that the news business is in trouble, but it is less understood why. Newspapers have had to cut back on reporters because of a steep decline in advertising, which used to account for 80% of revenues and an even higher proportion of profits. Combined print and digital advertising revenues for newspapers are now one-third of their peak in 2000 as companies use online search and other more targeted forms of marketing. Adjusted for inflation, newspaper advertising revenue has fallen to 1950 levels. But while advertising continues to decline for many publishers, online as well as in print, people are consuming more news than ever. Readers have responded well when their favorite news brands have offered “all access” paid subscriptions, which include all digital versions. (Disclosure: A company I co-founded, Press+, powers digital subscriptions for more than 400 publishers around the world and is now owned by RR Donnelley.) Circulation revenues for U.S. newspapers rose 5% last year, the first increase in a decade. This is where Mr. Bezos and his experience at Amazon could make a big difference. In his annual Amazon shareholder letter in 2005, he wrote that many of the decisions at Amazon “can be made with data.” He added: “There is a right answer or a wrong answer, a better answer or a worse answer, and math tells us which is which.” The result is that Amazon is king of consumer satisfaction, with 200 million people buying $60 billion worth of everything from books to dog food. Orders are often based on Amazon’s personalized, data-driven recommendations. Ten million people subscribe to Amazon Prime, which provides free second-day delivery, 40,000 movies and TV shows, and the ability to “borrow” 300,000 e-books.

Getting in on the Scalping Act (page B1): Live Nation Entertainment Inc. and its Ticketmaster subsidiary have a new strategy for dealing with their sworn enemies, ticket scalpers: If you can’t beat ’em, join ’em. Heavy-metal fans looking for tickets to see Black Sabbath at the First Midwest Bank Amphitheatre near Chicago this month are getting a taste of the new approach. On Live Nation’s website, an unusual seating map lists available face-value seats right alongside pricier seats being offered for resale by others. A block of seats nine rows from the stage was recently listed for their face value of $156 each, including fees; one row back, a reseller was offering a pair for $360.80 each. Live Nation and Ticketmaster for years have been seeking ways to boost their participation in the $4 billion-a-year business of reselling concert tickets, currently dominated by scalpers and brokers who buy tickets at face value and attempt to flip them for a profit via websites like eBay Inc.’s Concert promoters, ticketing companies and even artists have expressed frustration that they don’t see any financial benefit as those speculators charge many times face value for the best seats to hot shows. Of course, scalpers also can mitigate risk for those presenting concerts: If demand for a show doesn’t meet expectations, the scalpers can end up holding unsold tickets or unloading them for below face. Finding a palatable way to participate in the aftermarket has proven elusive for Ticketmaster and Live Nation, which merged in 2010. Ticketmaster failed in its attempt to create a StubHub rival, TicketExchange, and it bought another resale site, TicketsNow, which also struggled. At one point Ticketmaster even considered forming a joint venture with several of the nation’s biggest ticket resellers. That experiment fell apart after a limited test run. In recent weeks Live Nation has started a limited, beta-version rollout of its latest effort, which merges its ticket-resale businesses onto its primary ticketing site, blurring the line between the initial face-value ticket and pricier, secondary-market tickets and better positioning the concert promoter to profit from tickets’ true market value.

Back-to-School Sales Offer Tough Test (page B2): While students are just getting ready to return to school, retailers may already be bracing for a disappointing grade. Several indicators are signaling less-than-stellar results. Back-to-school is closely monitored because it’s the industry’s second-biggest selling period before the December holidays and also serves as an indicator of how winter sales will shake out.

Fitness App Gets Venture Backing (page B3): While Weight Watchers struggles to keep its membership rolls from shrinking, its upstart challengers are beefing up. The popular health-monitoring app MyFitnessPal LLC is getting $18 million in new funding from Kleiner Perkins Caufield & Byers and Accel Partners, a bet by the venture-capital firms that Americans are ready to take more control over monitoring their health. The investment values MyFitnessPal—which claims 40 million users and is profitable—at between $100 million and $120 million, a person familiar with the matter said. MyFitnessPal plans to use the new funds to analyze the entries logged by users of its app and website for evidence of which diets or fitness plans are most effective. The company hopes it can feed more information to its users, like whether low-carbohydrate diets actually help people lose weight or whether skipping breakfast makes you eat more later in the day.

The Whistleblower Debate (page B4): A key unsettled question about protections for whistleblowers is whether tipsters have to take their claims to the Securities and Exchange Commission to qualify. Big U.S. companies have a surprising answer: Yes. The answer is surprising because companies, alarmed that new rewards for whistleblowers could undermine internal fraud-detection efforts and lead to a flood of regulatory actions, had argued before regulators that employees should raise allegations of corporate wrongdoing with their company first. But in an effort to escape liability in cases brought by whistleblowers claiming retaliation under the Dodd-Frank financial-overhaul legislation of 2010, they are increasingly claiming that tipsters aren’t protected if they didn’t go to the authorities.

Dufner Holds Off Furyk for PGA (page B6): American Jason Dufner put his foot on the pedal early in the final round at the PGA Championship here and never let it off. That’s not to say he was speeding or driving the least bit recklessly. The 36-year-old Cleveland native didn’t have to, not when he hit nine of 14 fairways and left himself the following distances for his four birdie putts on the day: six feet, two feet, two inches and two inches. The seemingly tranquil Auburn alumnus won his first major tournament by shooting a steady 68 Sunday in perfect golf conditions at the Oak Hill Country Club, redeeming his playoff loss to Keegan Bradley at the 2011 PGA at Atlanta Athletic Club. Dufner’s 63 in the second round broke the competitive course record at Oak Hill, and matched the lowest round ever recorded in a major. But to hoist the Wanamaker Trophy, Dufner had to motor past the 54-hole leader, Jim Furyk, and stay ahead of a star-studded leaderboard, with four other contenders within four shots of Furyk’s 11-under-par lead. Furyk, the 2003 U.S. Open winner, by no means played a poor round on Sunday. His one-over 71 might well have been enough if Dufner’s wedge game had not been so dialed in. And it was all the more impressive for the demons he was fighting. In 2012, Furyk led after 54 holes in four tournaments and lost each time, most agonizingly at the U.S. Open, where he bogeyed two of his last three holes. He also lost two of his three matches at the Ryder Cup, including a pivotal Sunday singles match against Sergio Garcia.

The Wall Street Journal: Saturday, August 10, 2013

Ranking Lists Don’t Rank High on Reliability (page A2): Two of the latest attempts to rank the unrankable met with unfriendly receptions—and those dim responses may not be the work of party-poopers. Condé Nast Traveler earlier this month grabbed headlines when it ranked Wilmington, Del., as the eighth unfriendliest city in the U.S. Local politicians had no idea what their townspeople had done to deserve it. And this past week, Princeton Review ranked the University of Iowa as the biggest party school in the country. That ran counter to data a university spokesman cited showing a decline in binge drinking—for instance, average drinks per person per session fell to a still-inebriated 5.92 from 7.43 in 2009. “We are merely pointing out that survey results compiled by the Princeton Review do not align with the data we are seeing and what our students are reporting,” says Tom Moore, the University of Iowa spokesman whose school’s No. 1 ranking comes after several years of finishing near, but not at, the top. These are the latest flare-ups of a long-running conflict between the rankers and the ranked. Rankings reactions are a component of the buzz these lists deliver, which is why rankings are staples for news publications—including, at times, The Wall Street Journal—advocacy groups and just about anyone else who wants to be quoted as an authority on something.

Philadelphia Faces School Funds Fight (page A3): Philadelphia officials are racing to find $50 million they say is needed to operate the city’s beleaguered public school system just weeks before the district’s 136,000 children are scheduled to resume classes. District officials have warned that without the money, they’ll be forced to delay the first day of school, now scheduled for Sept. 9, or operate on a half-day schedule. They are haggling with the City Council over a proposal to use a city sales tax to cover the difference. District leaders want the tax proceeds to go to schools, while the head of the city council thinks the money should be split between the city and the schools, which were taken over by the state in 2001. William Hite Jr., superintendent of the School District of Philadelphia, said he needs the funds to hire back about 1,000 school counselors, assistant principals, aides and others who were among some 4,100 district employees laid off during budget cuts earlier this year. More staff is essential to ensure students are safe and cared for in the city’s 212 schools, he said.

Bill Distills Battle Over Jobs, Pay (page A5): The nation’s capital is locked in a debate that echoes one emerging around the U.S. over whether increasing employment or raising wages should be the higher economic goal. The clash here has been spurred by a bill the City Council passed last month requiring large retailers to pay a so-called living wage higher than the minimum wage and intended to help employees better support themselves and their families. The bill, called the Large Retailers Accountability Act, is widely seen as aimed at Wal-Mart Stores Inc., which has responded by threatening to pull the plug on at least three of the six stores it has planned for the city. The legislation comes at a time of sluggish job growth driven by gains in low-wage sectors of the economy, according to the Aug. 2 jobs report. Positions are increasingly being filled not with the young and inexperienced but with older and more-skilled workers who can’t find other jobs. Similar living-wage debates have emerged in major cities including New York, Chicago and Detroit, including strikes by fast-food workers. Under the legislation, a large retailer whose parent company’s annual revenue exceeds $1 billion, and whose stores occupy 75,000 square feet or more would be required to pay a wage of at least $12.50 per hour. That is several dollars more than Washington’s minimum wage of $8.25 and the federal minimum wage of $7.25. The legislation sparked a furious debate among retailers, advocacy groups and city officials. Supporters say it is an opportunity to launch a national campaign and provide relief to working-class families. Opponents of the bill say the benefits that large retailers bring to poorer parts of the city, including retail outlets and jobs, are too important to imperil in favor of sending a political message.

The Man Who Would Overthrow Harvard (page A11): ‘If you think as we do,” says Ben Nelson, “Harvard’s the world’s most valuable brand.” He doesn’t mean only in higher education. “Our goal is to displace Harvard. We’re perfectly happy for Harvard to be the world’s second most valuable brand.” Listening to Mr. Nelson at his spare offices in San Francisco’s Mid-Market, a couple of adjectives come to mind. Generous (to Harvard) isn’t one. Nor immodest. Here’s a big talker with bold ideas. Crazy, too, in that Silicon Valley take-a-flier way. Mr. Nelson founded and runs the Minerva Project. The school touts itself as the first elite—make that “e-lite”—American university to open in 100 years. Or it will be when the first class enters in 2015. Mr. Nelson, who previously led the online photo-sharing company Snapfish, wants to topple and transcend the American academy’s economic and educational model. And why not? Higher education’s product-delivery system—a professor droning to a limited number of students in a room—dates back a thousand years. The industry’s physical plant (dorms, classrooms, gyms) often a century or more. Its most expensive employees, tenured faculty, can’t be fired. The price of its product (tuition) and operating costs have outpaced inflation by multiples. In similar circumstances, Wal-Mart took out America’s small retail chains. Amazon crushed Borders. And Harvard will have to make way for . . . Minerva? “There is no better case to do something that I can think of in the history of the world,” says Mr. Nelson. Mr. Nelson calls Minerva a “reimagined university.” Sure, there will be majors and semesters. Admission requirements will be “extraordinarily high,” he says, as at the Ivies. Students will live together and attend classes. And one day, an alumni network will grease job and social opportunities. But Minerva will have no hallowed halls, manicured lawns or campus. No fraternities or sports teams. Students will spend their first year in San Francisco, living together in a residence hall. If they need to borrow books, says Mr. Nelson, the city has a great public library. Who needs a student center with all of the coffee shops around? Each of the next six semesters students will move, in cohorts of about 150, from one city to another. Residences and high-tech classrooms will be set up in the likes of São Paulo, London or Singapore—details to come. Professors get flexible, short-term contracts, but no tenure. Minerva is for-profit. Mr. Nelson wants to bring this technological disruption to the top end of the educational food chain, and at first look Minerva’s sticker price stands out. Freed of the costs of athletics, the band and other pricey campus amenities, a degree will cost less than half the average top-end private education, which is now over $50,000 a year with room and board. His larger conceit, inspired or outlandish, is to junk centuries of tradition and press the reset button on the university experience. Mr. Nelson offers a fully-formed educational philosophy with a practiced salesman’s confidence. At Minerva, introductory courses are out. For Econ or Psych 101, buy some books or sign up for one of the MOOCs—as in massive open online course—on the Web.

The Smartphone Boys of Summer and What They’re Missing (page A13): Today, though, we can’t seem to stop ourselves from incessantly searching for it, stalking it. All those screens that have come to dominate our lives—it is as if we have assigned ourselves to be night-telegraph editors on some mythical newspaper, nervously surveying the wires full-time, fretting that being a few minutes or even a few seconds late discovering the latest smidgen of information will put us at a disadvantage. Genuine news, entertainment news, news of our acquaintances that they post obsessively online: Because the news of the wider world, and of our considerably narrower personal worlds, is so ceaselessly available to us, we seem unable or unwilling to look away. But something may be lost when we are forever peering at those screens, waiting for bulletins profound and puny.  Whatever their most treasured memories of the summer of 2013 may turn out to be, whatever fond recollections will sustain them and bring them private smiles on warm evenings 30 or 40 years from now, they’re not going to find it on those screens. So many of us are guilty of it: of searching in the wrong place for the news that matters. Look at those screens long enough, and by the time you look up, summer’s gone.

At PGA, Oak Hill Changes Personality (page A14): It was a wild day for scoring Friday in the second round at the PGA Championship. Heavy rain during the early going complicated every shot for the morning wave of players—wet hands, mud balls, water on the greens—but Webb Simpson found a way to tie the course record at Oak Hill Country Club with a six-under-par 64, while Justin Rose recovered from a bad start to shoot 66. Adam Scott, the first round co-leader, slogged to a 68 and kept his lead, at seven under par, after all the morning players finished. But in the afternoon, scoring hell—or heaven—broke loose. Jason Dufner did Simpson one better, shooting 63 to tie the all-time low score in any major. He had a 12-foot birdie putt on 18 to break the record, which had been achieved 25 times, but left it an agonizing one foot short. The inscrutable Dufner, who finished at nine under par for a two-stroke lead, showed no emotion except for a wry smile at 15, after narrowly missing a lengthy birdie putt, and relief after only just making his final one-footer on the 18th green.

Friday’s Markets: Blue Chips End Weekly Winning Streak at Six (page B4): On the seventh week, the Dow rested. The Dow Jones Industrial Average fell 72.81 points, or 0.5%, to 15425.51 Friday, snapping a six-week stretch of weekly gains that brought the 30-stock index back to record territory. The Dow fell 1.5% for the week but still is up 18% this year. The S&P 500 slipped 6.06 points, or 0.4%, to 1691.42. The Nasdaq Composite Index fell 9.02 points, or 0.2%, to 3660.11.

The Dark Side of Higher Yields (page B7): Master limited partnerships, the publicly traded energy firms offering the steady high income many people crave, have been hotter than a wellhead fire. Investors should proceed carefully, however, or they might get scorched. Lured by generous quarterly cash payouts, investors poured nearly $8 billion into mutual funds and exchange-traded products specializing in MLPs in the first half of 2013, according to Morningstar, the investment-research firm. More than one-quarter of the roughly $26 billion in the total assets at these funds has arrived since Dec. 31. MLPs’ returns have been strong. Over the decade ended July 31, MLPs generated an average total return, or income plus price changes, of 16% annually; U.S. stocks overall, as measured by the S&P 500, returned an annual average of 7.6%.

Did You Miss Your Chance to Make a Real-Estate Killing? (page B7): Many investors are still hailing the rebounding housing market as a bargain, but some valuation measures indicate many markets are now fairly priced. Only a year and a half ago, none other than Warren Buffett told CNBC he would invest in “a couple hundred thousand” single-family homes if it were practical. But in that short period, the national housing market has gone from the cheapest it has been in a quarter-century to slightly overpriced—at least according to some measures. Relatively cheap mortgages still make it a great time to buy a home to live in, but anyone hoping to treat it as an “investment” should be wary.

Take Back Your Pregnancy (page C1): Modern pregnancy comes with a long list of strict rules, but does it have to? Economist Emily Oster examines the data and finds room for choice amid the familiar limits. When Oster got pregnant three years ago, she knew that I’d face lots of decisions—whether to have coffee or a glass of wine, what kind of prenatal testing to do, whether to use an epidural. Oster figured that I’d study the pros and cons and then make her own informed choices, as she normally did (with guidance and information from my doctor, of course). This isn’t what it was like at all. In reality, medical care during pregnancy seemed to be one long list of rules. Being pregnant was a good deal like being a child again. There was always someone telling her what to do, but the recommendations from books and medical associations were vague and sometimes contradictory. It started right away. “You can only have two cups of coffee a day.” Oster wondered why. What did the numbers say about how risky one, two or three cups were? This wasn’t discussed anywhere. The key to good decision making is evaluating the available information—the data—and combining it with your own estimates of pluses and minuses. As an economist, Oster does this every day. It turns out, however, that this kind of training isn’t really done much in medical schools. Medical school tends to focus much more, appropriately, on the mechanics of being a doctor. Pregnant women are clamoring for better information about everything from exercise to hair dye to bed rest and delivery. They don’t want categorical limits based on fuzzy science and half-baked research. They want to assess risks for themselves and make their own best decisions.

All the Presidents’ Vacation Reading (page C3): This month, for a fourth summer, President Barack Obama will vacation on Martha’s Vineyard. What will he read during his down time? That, too, has become something of a summer ritual. Mr. Obama is far from the most voracious presidential reader. John Adams and Thomas Jefferson were among the best-read people on the continent in their day. Abraham Lincoln read a great deal as a youth, albeit from a limited library, and his reading helped to propel him from his obscure origins. Teddy Roosevelt was also addicted to the printed word, observing that “reading with me is a disease.” He could polish off two or three books a day even while serving as president, and woe betide the bore who failed to hold the president’s attention in a White House meeting. If not engaged by his interlocutor, Roosevelt was prone to pick up a book and start reading. Among modern presidential readers, Harry Truman ranks near the top. Despite being the last president not to have attended college, he was a tremendous autodidact, especially in history. He once said that “The only thing new in the world is the history you don’t know.” His daughter Margaret quipped that, if the world were about to end, Truman would “not look up until he got to the bottom of the page he was reading.” In recent years, nonstop coverage of the White House has led reporters to pay careful attention to presidential vacation reading. The shelves of the California ranch house where Ronald Reagan took his holidays were filled with books, from Westerns to works of conservative thought. George H.W. Bush, widely seen as a nonreader, recounted that his 1991 vacation plans included “a good deal of tennis, a good deal of horseshoes, a good deal of fishing, a good deal of running—and some reading. I have to throw that in there for the intellectuals out there.” Bill Clinton read so much on vacation and during the rest of the year that the journalist Elizabeth Renzetti joked, “[R]emember Bill Clinton saying that Max Weber was his summer reading? No wonder college girls threw themselves at him.” George W. Bush was a more serious reader than his cowboy image suggested. His vacation reading one summer included “Salt” by Mark Kurlansky, “Alexander II: The Last Great Tsar” by Edvard Radzinsky and “The Great Influenza” by John Barry. The Barry book in particular left a strong imprint on Mr. Bush. After reading it, he pushed his administration to develop a comprehensive influenza plan. Mr. Obama himself cast doubt on his reputation as a reader when he admitted that, as president, “you have very little chance to really read. I basically floss my teeth and watch SportsCenter.”

Weekend Confidential: An Interview with M. Night Shyamalan (page C11): M. Night Shyamalanhas spent most of his career as a filmmaker coming up with supernatural plotlines and creepy characters, but these days, he says, he’s got a different sort of fantasy character in mind: Clark Kent, the nerdy, bookish counterpart to the glamorous, highflying Superman. Best known for producing films such as “The Sixth Sense” and “The Village,” Mr. Shyamalan is about to come out with a book called “I Got Schooled” on the unlikely subject of education reform. He’s the first to admit what a departure it is from his day job. “When you say ‘ed reform’ my eyes glaze over,” Mr. Shyamalan says, laughing. “I was going to have some provocative title like ‘Sex, Scandals and Drugs,’ and then at the bottom say: ‘No, really this is about ed reform.’ ”

Simplify Your Tech Life, Thoreau-Style (page D1): You may never have read “Walden” but you’re probably familiar with the premise: a guy with an ax builds a cabin in the woods and lives there for two years to tune out the inessential and discover himself. When Henry David Thoreau began his grand experiment, in 1845, he was about to turn 28—the age of a typical Instagram user today. Thoreau lived with his parents right before his move. During his sojourn, he returned home to do laundry. Thoreau’s circumstances, in other words, weren’t so different from those of today’s 20-somethings—which is why seeking tech advice from a 19th-century transcendentalist isn’t as far-fetched as it may sound.But even the average social-media curmudgeon’s views on gadgetry aren’t as extreme as those of Thoreau. Whereas he saw inventions “as improved means to an unimproved end,” most of us genuinely love our iPhones, Instagram feeds and on-demand video. We just don’t want them to take over our lives, lest we forget the joy of reading without the tempting interruption of email notifications, or the pleasure of watching just one good episode of a television show per sitting. Thankfully, we don’t have to go off the grid to achieve more balance. We can arrive at a saner modern existence simply by tweaking a few settings on our gadgets and the services we rely on. Why renounce civilization when technology makes it so easy to duck out for short stretches? Inspired by the writings of Thoreau, we looked for simple tools—the equivalent of Thoreau’s knife, ax, spade and wheelbarrow—to create the modern-day equivalent of a secluded cabin in the woods. Don’t worry: There’s still Wi-Fi.

  1. Manage your Facebook ‘friendships’
  2. Stay just out of touch
  3. Read something longer than 140 characters
  4. Ditch your smartphone, driver
  5. Proactively prevent procrastination
  6. Take a walk for the heck of it

A Tale of Two Cities, and No Hot Showers (by Paul Rudnick – page D10): As a die-hard New Yorker, I think of travel as the distance between my bedroom and the bathroom. I think of New York as paradise, and I think of everywhere else as, well, everywhere else. Several months back, following Hurricane Sandy, I was forced to leave my home and make a journey so epic that it will one day become a cinematic franchise, requiring at least 15 separate films, all featuring Jennifer Lawrence as a girl who couldn’t take a hot shower for almost a week.


The Wall Street Journal: Friday, August 9, 2013

China Trade Offers Taste of Recovery (page A6): China’s economy is showing signs of stabilizing after a six-month slowdown, adding to better global economic prospects as the U.S. steadily improves and Europe edges out of recession. July trade data released on Thursday showed stronger-than-expected global demand for China’s exports, good news for the key manufacturing sector. As important, a greater-than-expected increase in imports suggested strengthening demand in China’s domestic economy. The data followed a survey of manufacturing companies released last week that showed modest expansion in Chinese factory activity in July. Taken together, the latest numbers indicate that China’s growth may have bottomed out in the second quarter, raising expectations of steady growth in the remaining months of the year. That could help China’s economy hit Beijing’s 7.5% growth target for the year, following economists’ concerns that it could post an embarrassing miss.

Does Faith Make You Healthier? (page A11): A ream of recent scientific research has given the faithful reason to rejoice: Belief is good for you. Yet believers should be wary of celebrating these findings too much. The faithful may be winning at the game of life, but they’re playing by rules that social scientists have written in essentially post-religious terms. While churches define the highest aims of life as salvation or enlightenment, social science research replaces these with health and wealth, well-being and satisfaction.

The Secret of the Braves’ Winning Streak: Waffle Ball (page A13): The Atlanta Braves go into Friday night’s game at home against the Miami Marlins with a 13-game winning streak, the longest in the majors this season. The streak has launched the team 15½ games ahead in the National League’s East Division. How did the Braves suddenly get so good? Some strong pitching and clutch hitting definitely helped. But if you ask an Atlanta fan, you’re likely to get a different answer, as I found out at the closest thing New York has to a Braves bar: Foley’s Pub, which was renamed Chipper’s last year to honor Chipper Jones, the team’s future Hall of Famer, on his final visit to the city before retiring. Braves fans at the pub on West 33rd Street this week were confident that they knew the source of the team’s good fortune: Waffle House. On July 26, Waffle House opened its first concession stand at Turner Field in Atlanta, serving its signature waffles and hash browns. That night the Braves knocked off the St. Louis Cardinals, 4-1. The Braves haven’t lost since, and word has spread.

Facebook’s Slow-Motion Video Push (page B1): Facebook Inc. has been planning for months to dive into the lucrative market for online video ads. The holdup: CEO Mark Zuckerberg doesn’t want to annoy its 1.1 billion members. As soon as this fall, Facebook plans to launch a video-ad service that will show members 15-second-or-less clips on both smartphones and the Web, according to people with knowledge of the matter. Facebook needs the ads to be sufficiently splashy that they will convince brands to fork over roughly $2 million per day. Yet since earlier this year, Mr. Zuckerberg and his engineers have toiled over how to make the ads not so distracting and slow that they alienate users, according to current and former employees and advertisers. The videos will appear prominently on members’ homepage news feeds, the people familiar said. Striking that balance between consumer happiness and commercial opportunity has been a challenge for the young company, leading to delays and frustrations among the marketers it is trying to woo.

July Retail Sales Disappoint (page B6): Retailers, particularly those that cater to teenagers, had a difficult start to the second half of the year and critical back-to-school season, as July sales came in below expectations. “Mall traffic trends overall were just weak in July,” said Barclays specialty retail analyst Matthew McClintock, adding the month was highly promotional as retailers tried to entice what shoppers there were. Although retailers are still clearing through some leftover spring clearance inventory, July offers the first look at how the companies are faring in the back-to-school season, which can typically be an indicator of holiday performance. While retailers posted strong results last year for July and back-to-school, this year is a different story.

Big-Game Buffett Is Thinking Small (page C1): Warren Buffett hasn’t fired his “elephant gun” much recently, but he has put his managers on the hunt for smaller prey. Berkshire Hathaway Inc.’s subsidiary operations collectively spent about $2.3 billion on 26 acquisitions last year, which the company says is a record amount. They have continued that streak this year, acquiring more than a dozen companies in the first half of 2013. Berkshire hasn’t disclosed the amount spent by its subsidiaries on acquisitions this year. With bigger, multibillion-dollar deals few and far between of late, Mr. Buffett increasingly favors such “bolt-on” acquisitions because they increase Berkshire’s earnings and enable it to use its cash pile, which stood at $36 billion at the end of June. Net cash flow from operations rose nearly 36% for the first six months of 2013 from a year earlier, putting greater pressure on Berkshire to use its cash rather than hoard it.

Thursday’s Markets: Data on Jobs, China Stop the Bleeding (page C4): Stocks advanced, rebounding from a three-session slide, following strong readings on U.S. jobless claims and demand for China’s exports. The Dow Jones Industrial Average rose 27.65 points, or 0.2%, to 15498.32, reclaiming positive territory after spending much of Thursday morning in the red. The S&P 500 rose 6.57 points, or 0.4%, to 1697.48. Both benchmarks notched gains for the first time this week. The Nasdaq Composite Index added 15.12 points, or 0.4%, to 3669.12.

Stocks Start to Look Overcooked (page C4): For the past several years, stock-market bulls have been able to argue that stocks are cheap. That argument is increasingly on shaky ground. In recent weeks, the S&P 500 index has pushed further into record territory. But those gains have come as profit growth has stalled. As a result, stocks in the S&P 500 are at their highest price/earnings ratio in nearly four years, and above their average multiple of the past 10 years. That has some investors becoming more cautious. “Valuations have gotten ahead of fundamentals,” said Michael McGarr, portfolio manager for the Becker Value Equity Retail Fund, which manages $202 million. “With valuations up here…there is some vulnerability in the market.”

Sloane Stephen’s To-Do List (page D1): It is difficult to look at Sloane Stephens’s lean, chiseled physique and not believe she is the future of women’s tennis. Just 20 years old, Stephens has a sparkling smile, outgoing personality and droll sense of humor. She could be America’s next female sports megastar. Stephens, who lives with her mother and younger brother in Los Angeles, has already risen to 17th in the world rankings and is the youngest player in the top 20. She knocked off top-ranked Serena Williams in Australia in January, and with a few more big wins, preferably in the spotlight of the U.S. Open later this month, Stephens could well fill the widening vacuum at the top of her sport. Taking that last step is proving to be far more difficult than her four-year-climb from a ranking in the 800s to her current perch. And as she plays a series of crucial tuneup tournaments ahead of the Open, Stephens and her handlers must cut down on a troubling propensity: She can disappear mentally for long stretches. In some smaller tournaments where she should dominate, she loses early. Asked about the key to achieving her goal, she deadpans: “Win more matches.” Her blueprint: pushing to overcome her flaws. With her coach David Nainkin, she is doing strength training aimed at producing an injury-proof core (she has been bothered by an abdominal muscle tear). She is focusing on serving harder and improving her footwork. She says her main goal is improving her mental toughness and concentration.

An Actor and Tech Investor On Playing Steve Jobs (page D1): It wasn’t an insanely tough task for Ashton Kutcher to physically resemble a young Steve Jobs in the biopic “Jobs” (Aug. 16). Getting inside the Apple Computer co-founder’s head was something else. Screenwriter Matt Whitley’s script renders a Steve Jobs who is petulant, inconsiderate and manipulative but somehow beloved, a countercultural troublemaker who found a way to appeal to mainstream tastes in one market after another. Mr. Kutcher brought some insight to the role. He is a well-known promoter of modern technology (he famously beat CNN to become the first entity with a million Twitter followers). As a partner in a venture fund that invests in early-stage consumer-technology companies, he knows the mind-set of entrepreneurs. Still, he says, “understanding Steve Jobs was almost like trying to understand a different species.” Interview excerpts…

There’s Gold in Them Thar Streets: Events for Weekend Warriors Become a Gold Mine (page D9): The foot race isn’t new. Cave men probably invented it. But suddenly it’s gushing wealth for entrepreneurs, big companies and private-equity firms. The weekend-warrior market is a gold mine, and tapping into it doesn’t require Silicon Valley-style geek credentials or venture capital. Nor must a sports-business career begin anymore in the mail room of a sports network or big-league franchise. Joe Reynolds was 27 when he launched Red Frog Events, a Chicago-based producer of adventure races. In 2012, its sixth year, Red Frog posted revenue exceeding $50 million, prompting Inc. magazine to call it the nation’s ninth-fastest growing company. It can’t add races fast enough to satisfy demand for its $60-and-up slots. “This is just the beginning for Red Frog,” said Reynolds. Once a largely nonprofit business, the race industry now boasts publicly traded players in entertainment (Walt Disney Co.), apparel (Nike Inc.) and health clubs (Life Time Fitness). Private equity firms, meanwhile, have purchased Competitor Group Inc. and World Triathlon Corp., owner and organizer of Ironman-brand triathlons.

Hip, Urban, Middle-Aged (page M1): Hip urban neighborhoods are aging, as a growing chunk of adults in their 50s and 60s and older give up their longtime homes and head for trendy condos. The invasion of older, moneyed buyers has “created a gold rush” in some of these areas, says Dean Jones of Realogics Sotheby’s International Realty in Seattle. Mr. Jones’s firm sold 34 condominium penthouses and luxury town homes for more than $1 million in downtown Seattle neighborhoods between March and October of 2012—a large percentage to baby boomers. It was a 40% increase over the same period a year earlier. The migration of baby boomers to cities, which started in the 1990s but slowed during the recession, is now regaining steam. According to online real-estate brokerage Redfin, more than a million baby boomers moved to within 5 miles of the downtown of the 50 largest cities between 2000 and 2010, while the same number of baby boomers moved away from neighborhoods located 40 to 80 miles outside those 50 cities’ downtown areas. Moreover, according to the American Housing Survey, 9.6% of households 55 and older in central cities lived in condos in 2011, the past year for which figures are available, up from 7.3% in 2005. That is despite the negligible growth in the supply of condos and coops over that same period. “Baby boomers are tired of mowing the lawn. They’re looking for a more diverse environment,” says Chris Leinberger, chairman of the Center for Real Estate and Urban Analysis at George Washington University School of Business. In some cases, as the older, more affluent baby boomers—typically defined as born between 1946 and 1964—move to these neighborhoods, younger residents are starting to move out to avoid rising prices and the growing number of older folks. Mr. Jones in Seattle says it used to take about 10 years for the hipsters to get priced out of a neighborhood they pioneered—now they are moving out after five. Jeremy Penn, a 34-year-old artist in Williamsburg, says he has heard of plenty of younger residents who are moving south, moaning about what is jokingly called the “Broken Hip-sters,” who are driving up prices. While he says it is true that a lot of artists can’t afford to have studios there anymore, he notes that complaining “is a major characteristic of being a hipster.”

Price High or Go Low (page M3): “The Price Is Right” isn’t just a game show. It is a mental strategy real-estate agents use to get the most money when listing a home. When setting an asking price, there are two schools of thought: In one, agents overprice properties in the belief that a higher asking price will draw higher initial offers from potential buyers. Wendy Jodel, associate broker with Town Residential in New York City, says overpricing works when inventory is low. Ms. Jodel recently listed a two-bedroom apartment on Manhattan’s Upper East Side for $1.35 million—4.5% above the price of similar apartments nearby. “I had no competition,” she says, adding that few comparable apartments are available in the area. The apartment closed this week with multiple offers for $1.32 million. Other real-estate agents take the opposite approach, pricing homes below nearby properties in hopes of starting a bidding war. Chris McDonnell, senior associate broker with Coldwell Banker Distinctive Properties in Vail, Colo., says he prefers to underprice homes by 5% to 10%. Now, even in a heated market, buyers are looking for a bargain, he says. If sellers start low, they could potentially add 10% to 15% to the sale price. “There’s so much pent-up demand out there right now. Money is just waiting on the sidelines,” he says. This strategy, however, poses a challenge: “It’s really hard to get your seller to agree to that,” Mr. McDonnell says. New research tackles this dilemma. A study published in the Journal of Economic Behavior & Organization in May found that homeowners who set the initial asking price 10% to 20% higher than similar houses in the neighborhood see a slight increase of $117 to $163, on average, in their sale price. Pricing a home 20% or more than similar houses leads to an impact three to four times as big. Pricing a home 10% to 20% lower than homes in the neighborhood leads to a decrease of $117 to $187, on average, in the home’s sale price.

Shock Rocker Among Blue Bloods (page M12): In 1971, shock rocker Alice Cooper and the band needed a place to live and rehearse. Their manager rented a stately mansion in Greenwich, Conn.


The Wall Street Journal: Thursday, August 8, 2013

‘Are You Having Fun at Camp?’ Parents Scrutinize Photos for Clues (page A1): Stalking the camp photo gallery has become a rite of summer for parents. Most residential camps upload images and videos shot by staff photographers to secure websites every day.

Europe Heads Toward Recovery, but Slowly (page A7): Europe’s longest recession since World War II appears to be on the verge of ending, driven by a surge in German growth that is helping to blunt the severe economic pain faced by many in the region, but is too modest to lift the global outlook. A string of recent economic data, including a robust German industrial production report on Wednesday, has boosted hopes that the 17-member euro zone has returned to weak growth after six quarters of contraction. German industrial production in June jumped 2.4% from May, the country’s economy ministry said Wednesday, beyond economists’ expectations for a 0.3% gain. The positive news from Germany followed an upbeat survey of purchasing managers in the euro zone last week and signs of slowing recessions in Italy and Spain—the region’s third- and fourth-largest economies. Across the Channel, the Bank of England upgraded its growth forecasts on Wednesday. And Portuguese unemployment fell for the first time in two years.

Robots, 3-D Printers and Other Looming Innovations (page A13): Is technology to blame for our stubborn unemployment? President Obama scored ATMs and airport kiosks in a 2011 “Today Show” interview, blaming them for “structural issues with our economy.” Other technophobes have piled on. Former Labor Secretary Robert Reich wondered late last year: “What if we’re stuck at a new normal of high unemployment and low job growth? It’s possible because technology might just have gotten the best of us.” In March, declared “Your iPhone kills jobs.” And in May, the Economist suggested “technology may destroy more jobs than it creates.” These Luddites are wrong. The road to wealth does indeed pass through the graveyard of today’s jobs. But history shows that better, higher paying jobs are always created by technology—even if no one seems to remember this during periods of creative destruction. The trick is to lower the cost of new machines and inventions that can do things never before possible, making them available for wide use. Here are a few recent examples that could be economic game-changers and job-creators:

  • 3-D printing
  • Blood markers
  • Gene therapy
  • Funding platforms
  • Robots

Android Seizes Phone Market (page B1): Google Inc.’s Android software continues to steamroll the competition in smartphones, posing bigger problems for companies like Apple Inc. and BlackBerry Ltd. New data Wednesday from research firm IDC found that Apple’s share of the global market slid to 13.2% in the second quarter from 16.6% in the year-earlier period. Handsets running Android, meanwhile, jumped to 79.3% from 69.1%.

Building Middle-Manager Morale (page B1): Training session are becoming familiar at companies from telecom to health care to retail—especially those attempting rapid change. According to a study by research and consulting group Bersin by Deloitte, 50% of midlevel leaders received formal leadership development in 2012. The average spending per midlevel leader across the U.S. was $2,700 in 2012, up from $1,000 in 2009. The hope is that managers will attend talks and tackle problems, learn negotiation skills and become better leaders. And if managers walk away with a rosier view of their company, that is a plus. Middle managers need the boost. Though unemployment among the middle ranks remained low during the recession and recovery, many presided over layoffs, forcing them to do more with less. Numbers show that levels of engagement following the financial crisis fell more sharply among middle ranks than any other group.

Toshiba Sticks with TV, PCs (page B4): Toshiba’s CEO won’t pull the plug on unprofitable TV and PC units, shunning the “easy option” of exiting cutthroat competition for a chance to reclaim its former prominence in the businesses. Lifted by its flash-memory chip and power-equipment businesses, Toshiba has been profitable for the past three fiscal years despite losses exceeding ¥50 billion ($512 million) at its TV operations in each of the past two years. The computer business is equally difficult. Toshiba was the first company to commercialize a notebook computer in 1985 and dominated the market during the mid- to late-1990s. As its position weakened, Toshiba wrestled with razor-thin profit margins in recent years amid unrelenting price competition in the PC industry. As smartphones and tablet computers encroach on PC demand, conditions at the business have worsened. “People might say ‘get rid of the PC or TV business.’ It may be extreme to say this, but we can do that anytime—although I have no intention of doing so,” said Mr. Tanaka, a 40-year veteran of the company. “But if we did get rid of the TV and PC businesses, the next question would be ‘what’s next?’ That would turn Toshiba into a very unbalanced business structure.”

How to Get Ahead: Some Tips (page B5): In the course of a career, the middle rungs of the corporate ladder can feel like a black hole, especially as job opportunities thin at higher levels. But managers can rise from the middle, provided they think and act like the leaders several levels above, says Mary Ann Gontin, a managing partner who conducts leadership training for midlevel managers at human-resources consulting firm OI Partners Inc. Ready to make a move? Here’s how to do it.

  • Think big
  • Ask for input
  • Communicate
  • Give credit where it is due
  • Take control of meetings
  • Step up
  • Take stock
  • Be realistic

Tesla Output Rises (page B6): Luxury electric-car maker Tesla Motors Inc. reported a net loss for the second quarter, but exceeded Wall Street expectations for production and gross margins, sending its shares higher in after-hours trading. The Palo Alto, Calif., company posted a $30.5 million loss, or 26 cents a share, compared with a year-earlier loss of $105.6 million, or $1 a share. Revenue soared to $405.1 million from $26.7 million a year ago when its $80,000 and up Model S plug-in was just beginning deliveries.

A Company’s Way of Life (page B7): Whether it’s during the hiring process or just at the water cooler, founders of nascent businesses strive to foster a company culture that inspires collaboration and creativity. At times, they must also negotiate office politics in order to find a way to push employees toward higher productivity. The trick is figuring out how to balance productivity with collaboration. Here’s what three mentors on “WSJ Startup of the Year,” a new documentary on, had to say about maintaining company culture.

New Breed of Hostels Heads to U.S. (page B8): Modern hostels with rooftop yoga, dance lessons, and specialty cocktails are popping up in London, Paris, Berlin, Venice and other large European cities. These lodgings are a far cry from what traveling college students on a shoestring budget may recall years ago, when youth hostels meant sharing bare, cramped quarters with a communal bathroom down the hall. Now, some of Europe’s biggest hostel owners and operators are trying to replicate their success across the Atlantic. They are aiming to transform the disparate U.S. hostel scene from a collection of mom-and-pop operations to a business run more like a hotel chain.

Wednesday’s Markets: Fed Takes On a 3-Day Retreat (page C4): U.S. stocks fell for a third-straight day, as investors hung back after a global selloff on central-bank worries. The Dow Jones Industrial Average declined 48.07 points, or 0.3%, to 15470.67. On Tuesday, the Dow fell 93 points, the biggest decline since June. The S&P 500-stock index lost 6.46 points, or 0.4%, to 1690.91, with seven of 10 sectors lower. The Nasdaq Composite Index fell 11.76 points, or 0.3%, to 3654.01.

Woods Seeks End to a Major Drought (page D6): It’s been a splendid year for majors thus far. The suave and deserving Adam Scott won the Masters after a sensational duel and playoff at dusk against Angel Cabrera. At the U.S. Open at Merion, Justin Rose hit his winning shot from near the plaque in the fairway where Ben Hogan was photographed doing the same in 1950. Phil Mickelson, who narrowly lost at Merion, redeemed himself three weeks ago at the British Open at Muirfield with one of the greatest winning final rounds, a 66, in majors history. The PGA Championship, which gets under way Thursday here at Oak Hill Country Club near Rochester, N.Y., has all the earmarks of a major to match them. The field is the strongest of the year—among the world top 100, only the injured Louis Oosthuizen is missing—and the players are praising the course, host of five previous majors, as extremely difficult but fair. “There’s nothing fancy or tricky about it,” Scott said Tuesday. “The good shots will be rewarded and the bad shots will be fairly punished, depending on how bad you hit it.” Best of all, in terms of the PGA’s potential to produce a capper for 2013, you’ve got Tiger Woods and Mickelson, at Nos. 1 and 2 in the world, both playing at their peaks. At 37 and 43 years old, respectively, Woods and Mickelson may be entering a newly competitive stage of a decades-long rivalry that has never really generated much heat.

The Pairings That Really Matter (page D6): For all the choices golfers make during the day, the thorniest may come in the evening. That’s when they face a quandary they must handle with the utmost tact: Who should I eat with? In most professional sports, athletes can ask likeminded teammates if they want to hit up Applebee’s after the game. But golfers compete against one another individually, and often with players half or twice their age. More than 250 golfers this year have competed on the PGA Tour. Between January and September, they zigzag across the country (and head over to Scotland) for tournaments big and small. They often travel solo, especially in the spring and fall when many have children in school. Tournaments typically offer lunch, but golfers usually have to find their own dinner. “If you’re not friendly on the tour,” said Furyk, who’s 43, “it becomes a very lonely existence.” With that in mind, we present some suggestions that professional golfers might heed when asking another professional golfer to dinner.

  • Dinner is second base
  • Pick guys your own age
  • Know your price range
  • When in doubt, Chipotle