The Wall Street Journal: Saturday, August 24, 2013

CEO Exit Sets Microsoft on New Path (page A1): In announcing his sudden retirement Friday after more than three decades at Microsoft Corp., Chief Executive Steve Ballmer will leave his successor with the enormous task of reviving one of the world’s largest technology companies that finds itself beset by competitors on all fronts. Mr. Ballmer, 57 years old, along with his college buddy and Microsoft founder Bill Gates, built the company into a profit machine whose Windows operating system will still power nearly all the 305 million personal computers expected to be sold globally this year, according to research firm Gartner Inc. But it will run just 15% of all computing devices, if PCs, smartphones, tablet computers and other gadgets connected to the Internet are lumped together, given the rise of rivals such as Apple Inc. and Google Inc. Investors cheered the news of Mr. Ballmer’s departure, sending Microsoft shares up 7% to $34.75 on the Nasdaq Stock Market. Microsoft remains a behemoth financially. It generated nearly $78 billion in revenue in the year ended June 30—an average pace of $150,000 worth of sales every minute. The company’s fat profit, amounting to $21.86 billion last year, remains the envy of most industries. Under Mr. Ballmer’s watch, the company succeeded in limiting many threats, including the open software standard called Linux that Mr. Ballmer once described as a “cancer.” He also helped Microsoft recover from the shock of the U.S. government’s effort to break the company apart. But Microsoft generates nearly all of its profit from a trio of products—Windows, Microsoft Office and related software to run companies’ back-end computing gear—that are deeply dependent on the sales of Windows-powered PCs. Other products, such as the Xbox videogame machine and the Bing search engine, are either unprofitable or only marginally so.

The Real Reason College Costs So Much (page A9): Another school year beckons, which means it’s time for President Obama to go on another college retreat. “He loves college tours,” says Ohio University’s Richard Vedder, who directs the Center for College Affordability and Productivity. “Colleges are an escape from reality. Believe me, I’ve lived in one for half a century. It’s like living in Disneyland. They’re these little isolated enclaves of nonreality.” Mr. Vedder, age 72, has taught college economics since 1965 and published papers on the likes of Scandinavian migration, racial disparities in unemployment and tax reform. Over the last decade he’s made himself America’s foremost expert on the economics of higher education, which he distilled in his 2004 book “Going Broke by Degree: Why College Costs Too Much.” His analysis isn’t the same as President Obama’s. College costs have continued to explode despite 50 years of ostensibly benevolent government interventions, according to Mr. Vedder, and the president’s new plan could exacerbate the trend. By Mr. Vedder’s lights, the cost conundrum started with the Higher Education Act of 1965, a Great Society program that created federal scholarships and low-interest loans aimed at making college more accessible. In 1964, federal student aid was a mere $231 million. By 1981, the feds were spending $7 billion on loans alone, an amount that doubled during the 1980s and nearly tripled in each of the following two decades, and is about $105 billion today. Taxpayers now stand behind nearly $1 trillion in student loans. Meanwhile, grants have increased to $49 billion from $6.4 billion in 1981. By expanding eligibility and boosting the maximum Pell Grant by $500 to $5,350, the 2009 stimulus bill accelerated higher ed’s evolution into a middle-class entitlement. Fewer than 2% of Pell Grant recipients came from families making between $60,000 and $80,000 a year in 2007. Now roughly 18% do. This growth in subsidies, Mr. Vedder argues, has fueled rising prices: “It gives every incentive and every opportunity for colleges to raise their fees.”

Enter the Post-Ballmer World (page B1): Microsoft Corp.’s Steve Ballmer tried new operating systems, new gadgets and new management structures. But the times caught up with a man who helped build one of the greatest companies of the 20th century. Mr. Ballmer’s surprise retirement announcement Friday follows years of criticism about the waning growth and stagnant stock price of Microsoft, a force in the personal-computer era whose power was once so great that U.S. regulators sought to break up the company. PC sales—the lifeblood of Microsoft’s business—are on a steady decline. Business and casual users alike are switching to devices and services offered by Apple Inc. and Google Inc. Investors cheered the news, pushing Microsoft shares up 7%, or $2.36, to $34.75, in 4 p.m. trading Friday on the Nasdaq Stock Market. Microsoft’s offerings to customers “are downright confusing,” said Daniel Gasparro, an IT consultant who recently managed Microsoft software purchases for clients including Washington, D.C. law firm Patton Boggs LLP. “When you’re spread too thin, you’re not good at anything.” Mr. Ballmer, who took the reins from Chairman Bill Gates in January 2000, has responded to the changes by recently overhauling the company’s Windows software to be used with touch commands and introducing a Microsoft-designed tablet computer called Surface. More broadly, Mr. Ballmer has attempted in the past year to remake the company’s overarching strategy to become a provider of devices and services rather than emphasizing software sales. A management structure announced in July that abandons autonomous product groups is expected to speed the transition. But the shifts haven’t yet helped reignite the company’s growth, though its longtime businesses continue to produce healthy profits. Its stock hasn’t shown significant gains since the crash following the Internet bubble, which had taken its share price to a high of $58.03.

Inside Comcast’s $30 Billion TV Bet (page B1): Cameras popped as celebrities stepped out of tinted-window vehicles at a Manhattan ballroom where E! cable network was hosting an event for advertisers. Kim Kardashian preened on the red carpet while Ryan Seacrest chatted with fans. But Steve Burke, the CEO of E’s parent, NBCUniversal, was decidedly not in a partying mood. “I want to kill myself,” he said before ducking into an elevator. “They tried to get me to do the red carpet, but I said ‘no’,” he laughed. When the doors opened, a woman asked him to pose for a picture with the Olympian swimmer Ryan Lochte. “You’re a good sport to put up with all of these suits,” he told Mr. Lochte, leaning in for the photo. In the two years since Comcast Corp. bought NBCUniversal, Mr. Burke has shown a zeal for shaking things up with little sentimentality, weeding out some of the company’s most well-known personalities in the process. A straight-talking Harvard Business School graduate, Mr. Burke belongs to a new generation of media chieftains—including Time Warner Inc.’s Jeff Bewkes and Viacom Inc.’s Philippe Dauman—who are more enamored with the bottom line than with Hollywood glamour. He refrains from hanging out in the news rooms and indulging stars—hallmarks of his predecessor Jeff Zucker. Warren Buffett, who made him a director on his board at Berkshire Hathaway, describes him as “a personable guy, but not flamboyant.” Mr. Burke is the man in charge of pulling off a colossal wager. With Comcast’s two-stage, $30 billion deal completed in March, the cable giant is betting that its distribution business, combined with a content company, can create outsize benefits. That logic, of course, runs counter to the trend of big U.S. media companies breaking themselves into smaller pieces. Time Warner Inc. spun off its cable operations in 2009 after failed bids to happily marry its content and distribution arms; Viacom Inc. carved out its CBS broadcast television and radio business into a separate company in 2005. Mr. Burke argues that the Comcast model is different, and that the company he took over from General Electric Co. was “very broken.” “You don’t get a chance to buy a company like NBCUniversal unless it’s not doing well,” he said in his first major interview, sitting in an office notable only for its multiple television screens and many framed family photos. “We started from the premise there is a lot of opportunity here.”

Intern’s Death Scrutinized (page B2): Bank of America Merrill Lynch has appointed a committee of senior officials to investigate the circumstances surrounding the death of a summer intern in London, the bank said. The bank’s statement said the “formal senior working group” would “review all aspects of this tragedy” and “listen to employees at all levels” as more information becomes available. The group at the investment-banking division of Bank of America Corp. will be looking at, among other things, whether its interns and other junior employees are encouraged to work overly long hours or are pushed into unhealthily competitive environments as they vie for a limited number of jobs, said a person familiar with the situation. Moritz Erhardt, who was 21 years old, died on Aug. 15, just before completing his internship with the bank’s investment-banking group. While his cause of death is unknown, it has become a cause célèbre in the U.K., generating widespread media coverage. Like other Bank of America interns, Mr. Erhardt was rotating through the division, working on a variety of projects. Long working hours were the norm, as is often the case at investment banks in London, according to a person familiar with the matter. Interns at investment banks often work between 60 to 80 hours a week, said Scott Rostan, founder of Training the Street Inc., which provides financial-training courses for new Wall Street employees.

Friday’s Markets: Microsoft Helps Pull Stocks Up (page B5): U.S. stocks ended the week on a bright note, as a drop in Treasury yields and a rally in Microsoft helped divert investors’ attention away from recent concerns over Federal Reserve policy. It was an eventful week for stocks, if not an active one in terms of volume. Stocks slumped early in the week, with blue chips experiencing the longest losing streak in over a year and Treasury yields jumping to two-year highs, amid increasing worries that an improving economy would prompt the Fed to start slowing the flow of liquidity by tapering bond purchases as early as September. The market started rebounding on Thursday, as investors shook off technical issues that forced trading halts in all Nasdaq Stock Market-listed for three hours that afternoon. The Dow Jones Industrial Average rose 46.77 points, or 0.3%, to 15010.51 on Friday. The Dow still posted a third-straight weekly loss, the longest such stretch since November 2012. The S&P 500-stock index gained 6.54 points, or 0.4%, at 1663.50, and the Nasdaq Composite Index advanced 19.09 points, or 0.5%, to 3657.79. The S&P 500 and Nasdaq posted weekly gains.

Investors Embark on a European Tour (page B7): Things are starting to come together for the continent that almost fell apart. The economy in the 17-member euro zone is growing again—slowly—after contracting for more than a year. Signs of revival are showing up in data on business activity and consumer confidence. As in the U.S., central bankers’ extraordinary commitment to injecting cheap money into their economies has so far helped avert disaster. The euro zone hasn’t splintered, as some feared, and no country has dropped the common currency. As worries ease, markets are up from Ireland to Italy. Benchmark national indexes in the U.K., France and Germany have climbed at least 10% this year. The pan-European Stoxx Europe 600—akin to the S&P 500 in the U.S.—is up 19% in the 13 months since Mario Draghi said the European Central Bank, which he heads, was “willing to do whatever it takes to preserve the euro.” Investors planning their own grand investing tour of Europe’s stocks should know there still are discounts available. But as many a shopper in the markets of London, Paris or Rome will agree, it can pay to be choosy. For instance, many fund managers see more near-term upside in consumer goods and banks than in European utilities or energy firms. There are several options for investors. Low-cost index funds, such as the Vanguard FTSE Europe exchange-traded fund—which charges 0.12% in fees, or $12 for every $10,000 invested—offer broad exposure that includes many of the region’s global heavyweights. There also are actively managed, Europe-focused funds run by stock pickers who try to beat benchmark indexes, and global funds that feature a hefty dose of European exposure. In addition, many European companies issue American depositary receipts that trade like shares on U.S. exchanges. Some firms only trade on home-country exchanges, which U.S. investors can access through brokers or international accounts, though this typically involves taking on currency risk and navigating complicated tax rules.

Lofty Profit Margins Hint at Pain to Come for U.S. Shares (page B7): Profit margins at near-record levels—watch out below! If you are wondering what might prove to be the stock market’s Achilles’ heel, look no further than its dependency on near-record corporate profit margins. Any sizable decline would almost certainly translate into big losses for the stock market. Given the current high levels, such a retreat seems likely. Investors therefore may want to begin building up a healthy cash position to take advantage of lower prices in coming years. U.S. corporations, on average, currently report a profit of 9.3 cents for every dollar of sales, according to U.S. Commerce Department data—a profit margin of 9.3%. It has gotten only slightly higher than this over the past six decades: In the fourth quarter of 2011, it was 10%. The average since 1952 is 5.9%. Profit margins in the past have exhibited a strong historical tendency to “revert to the mean,” according to James Montier, a visiting fellow at the U.K.’s University of Durham and a member of the asset-allocation team at Boston-based GMO, an investment firm with $108 billion under management. That is, above-average levels in the past have tended to quickly fall, just as below-average levels in the past have soon risen. Consider all occasions since the early 1950s in which the profit margin rose to at least 6.9% or fell to at least 4.9%—one percentage point away from its historical mean, in other words. On average, it was back at its mean in just 4.8 years.

Microsoft: Hitting Ballmer Out of the Park (page B14): Merely by announcing his retirement, Steve Ballmer can more than pay for it. Shares in Microsoft leapt more than 7% Friday when the software giant announced its chief executive will retire within 12 months. Owning 333 million shares of Microsoft, Mr. Ballmer’s personal net worth increased by about $800 million on the news. Microsoft needs a change in leadership. This is a company that, after establishing its dominance in the personal-computing market 30 years ago, whiffed badly on two of the next three computing megatrends: the Internet and mobile. Former CEO Bill Gates deserves blame for missing the Internet. Blowing it in mobile is Mr. Ballmer’s error, having taken the reins in 2000. And that is arguably more dangerous to Microsoft’s long-term financial outlook, because one of the company’s largest businesses is writing software that powers computers, most successfully in PCs and servers.

Tell Harvard What You Think (page C3): This spring, with little fanfare, the folks behind the Common Application—the main application form for almost 500 of the nation’s top colleges and universities—announced a big change: the personal statement, the form’s core essay, has been extended from 500 to 650 words long. I thought: That’ll be $13,000. Several years ago, on a high floor in a midtown Manhattan office, a father offered me $10,000 to write his son’s personal statement. Apparently he had misunderstood what was meant by “independent college applications adviser.” The publishing industry may be in a tailspin, but in some places, writers can still earn $20 a word. Thanks to the Common Application’s changes (and not including inflation), that’s $13,000 a kid. Though I had other “day jobs,” for 15 years I worked discreetly as a college-applications adviser in cities from Los Angeles to London. I never wrote a student’s essay, but I was practicing a dark art: such tutoring privileges the elite whose parents can afford it and profits from a miserable process. The grim statistics of the college admissions race (last year Harvard reported a 5.79% acceptance rate), fueled by an obsession with trophy schools, have warped what might be a powerful threshold for adolescents. At the very moment when teenagers are invited to offer what they’ve learned and who they’ve become, their voices are hijacked by well-meaning adults who think kids can’t possibly be allowed to risk answering these questions on their own. In my years handling applications to elite schools, from Harvard to Haverford, Davidson to Dickinson and everything in between, I was often surprised by where students did gain acceptance. But in every case it was a student who wrote a fabulously independent essay. Not necessarily hyper-sophisticated. But true. My students always asked me, What should I write about? I’d answer: You are a student of the world. What is it that moves you? What incites you, enrages you? The first-person pronoun is a mighty tool. Use it.

Weekend Confidential: An Interview with Edward Frenkel (page C11): The words love and math aren’t usually uttered in the same breath. But mathematician Edward Frenkel is on a mission to change that, uniting the terms in both his recent film, “The Rites of Love and Math,” and upcoming book, “Love and Math.” Both are attempts to bridge the gap between his passion for math and the popular appetite for it. “You say the word ‘math’ and people shut down,” says Mr. Frenkel, sitting outdoors in New York’s Bryant Park. In his book, to be published in October, the tenured professor at the University of California at Berkeley argues that the boring way that math is traditionally taught in schools has led to a widespread ignorance that may have even been responsible for the recession. “It’s like teaching an art class where they only tell you how to paint a fence but they never show you Picasso,” he says of elementary school math classes. “People say, ‘I’m bad at math,’ but what they’re really saying is ‘I was bad at painting the fence.’ ” Love is a different story, though. “People might think they hate math but everyone loves love,” he says. “I want to put more love into math.” And Mr. Frenkel, a youthful, puckish 45-year-old with a slight Russian accent and a flair for fitted shirts and tailored jeans, hopes to be math’s next leading man. With YouTube videos of his lectures at UC Berkeley viewed by hundreds of thousands of people—”and that’s even the most boring stuff,” he adds—Mr. Frenkel does indeed talk about math adoringly. “It is this great connector,” he says. “Nobody can take it away from us.” What he means is that while the philosopher Pythagoras lived over 2,000 years ago, his theorem still exists today; it holds true across cultures, time and space. “How many things have the same endurance?” he asks. Mathematical formulas “have a quality of inevitability.”

Suites Get Even Sweeter (page D1): Over the past few years, the world’s fanciest hotels have been introducing a new generation of incredibly posh suites. These signatures spaces have eye-widening views and couture furnishings, and they are immense—in many instances, bigger than the average American home, which is about 2,200 square feet, according to the U.S. Census. In tourist magnets like New York, Paris, London and Dubai, the suites can be priced at tens of thousands of dollars a night. “These are for people who don’t pay their own bills,” said Steven Carvell, associate dean for academic affairs at the Cornell University School of Hotel Administration. “They have people who pay their bills for them.” Some of these super-suites are the crowning glories of new, haute hotels hoping to make a splash; others are being carved out of existing space by properties seeking to raise their profiles in the luxury market. And plenty are remakes of older suites that had faded and grown dated over the years.

Juicing, A to Z (page D7): “A juice bar on every corner” could be the unofficial slogan of the Obama era. In New York, the trend hit critical mass in the last year or so, but long before that, there was Melvin Major, Jr. “When I got into juicing 23, 24 years ago, it was kale, collards, chard,” he said of the prevailing circa-1990 approach. “I couldn’t do all-green—it was too hard-core. I wanted a great taste.” Today, at Melvin’s Juice Box in SoHo, Mr. Major serves the Jamaican Green, a lively kale, apple, lemon, ginger and celery blend with terrific body and a mineral finish. To describe a juice in this way—as one might a wine—is beginning to make sense now that more chefs are getting into the game. At long last, juice is having its epicurean moment. The new wave runs to refined combinations like beet, blood orange, fennel and shiso leaf—aka the Zest for Life, at Creative Juice in New York. (The juice’s creator, chef Michael Romano, said, “I’d serve it with a meal, something like roasted venison.”) Or elegantly spare sips like a honeydew, cilantro and lime mix at Moon Juice in Venice, Calif. Owner Amanda Chantal Bacon, a veteran of top restaurant kitchens, said, “I didn’t want to distract from the honeydew. The lime just polishes it a bit.” Up the beach in Santa Monica, Matthew Kenney of the acclaimed raw-vegan restaurant M.A.K.E. spikes his citrusy Spice-C with jalapeño. “You’re getting superpowered nutrition; you should feel it,” he said. “It’s a dynamic mouth experience.” Mixologists are expanding the repertoire of ingredients still further. In Portland, Ore., Lydia Reissmueller of TenderBAR is in the process of launching her own juice company. Her Succotash Smash of squash, tomato and sweet pepper gets its exotic herbal note from Mexican epazote. Among serious home juicers, cold-pressing—a slow process said to extract a more nutrient-rich juice—is the prevailing orthodoxy. But for those just starting out, Matt Shook of JuiceLand in Austin, Texas, recommends the easy-to-use Breville Juice Fountain (models start at $100), a centrifugal machine that pulverizes produce and spins to separate juice and pulp. The 26 fruits, vegetables, herbs and spices featured here are another great place to start. Use them in the recipes below, or just go with whatever tastes good to you. Delicious is the new hard-core.

2013_08_24_cmyk_NA_04To Tokyo with Gadget Love (page D11): Rest and relaxation in Waikiki. A boys’ night out in Vegas. Gadget shopping in Tokyo. Most guys might choose the first two escapes, but I’ve been going to Tokyo every year for the past decade to seek out the newest gizmos—products that haven’t yet made it to the west or are simply too niche to ever be imported. In my travels, I’ve found tiny wooden speakers hand-carved out of rare Japanese cedar, silicone keyboards that roll up like a burrito and a Gameboy cartridge filled with 500 games that were never released stateside. Some of the gadgets are brilliant solutions to urgent nerd problems; others will leave you dumbfounded. Don’t let the sillier products deter you, though. For every bewildering gadget you’ll find, a dozen more will be worth taking home. And, luckily for tech-obsessed tourists, getting around is easy: Most of the key stops are in the Akihabara neighborhood, on the Japan Railway’s Yamanote line. Here are five of my favorite spots, as well as a few of the curios that I found on my latest trip. While you can buy some of these products online, there’s no substitute for making an actual pilgrimage.

Don’t Let the Tech out of the Bag (page D12): Two bags keep your iPad, iPhone and other essential gear at the ready, here are two backbacks: the Osprey Pixel Port and Cocoon SLIM.


The Wall Street Journal: Saturday, July 20, 2013

Fifteen Years After Autism Panic, A Plague of Measles Erupts (page A1): When the telltale rash appeared behind Aleshia Jenkins’s ears, her grandmother knew exactly what caused it: a decision she’d made 15 years earlier. Ms. Jenkins was an infant in 1998, when this region of southwest Wales was a hotbed of resistance to a vaccine for measles, mumps and rubella. Many here refused the vaccine for their children after a British doctor, Andrew Wakefield, suggested it might cause autism and a local newspaper heavily covered the fears. Resistance continued even after the autism link was disproved. The bill has now come due. A measles outbreak infected 1,219 people in southwest Wales between November 2012 and early July, compared with 105 cases in all of Wales in 2011. One of the infected was Ms. Jenkins, whose grandmother, her guardian, hadn’t vaccinated her as a young child. “I was afraid of the autism,” says the grandmother, Margaret Mugford, 63 years old. “It was in all the papers and on TV.” The outbreak presents a cautionary tale about the limits of disease control. Wales is a modern society with access to modern medical care and scientific thought. Yet legions spurned a long-proven vaccine, putting a generation at risk even after scientists debunked Dr. Wakefield’s autism research. The outbreak matters to the rest of the world because measles can quickly cross oceans, setting back progress elsewhere in stopping it. By 2000, the U.S. had effectively eliminated new home-grown cases of measles, though small outbreaks persist as travelers bring the virus into the country. New York City health officials this spring traced a Brooklyn outbreak to someone they believe was infected in London. Measles outbreaks are a “canary in the coal mine,” says James Goodson, the lead measles expert at the U.S. Centers for Disease Control and Prevention. People who refuse one vaccine may be spurning others, setting communities up for outbreaks of other dangerous diseases that are slower to propagate, he says, such as diphtheria and whooping cough. China Eases Lending Controls to Boost Flagging Growth (page A6): China offered its strongest signal yet of worry over slowing growth and its commitment to financial reform, as it loosened a key control over its banks. China’s central bank said late Friday that beginning on Saturday it will scrap controls on lending interest rates and let financial institutions price loans by themselves. The move could let some borrowers tap cheaper loans at a time when China’s economy threatens to slow to a 20-year low and as corporate and local government borrowers struggle with a growing burden of interest payments. It also signals a commitment by China’s new leadership to undertake financial overhauls that many inside and outside the country say are needed to fuel continued growth. The move, which could threaten the profitability of China’s powerful state-run banks, likely faced considerable opposition. Federer’s Big Racket Gamble (page A11): Roger Federer is experimenting with a new tennis racket. For the 17-time Grand Slam winner, it might be an admission that many all-time great players refuse to make: he might need a little help. A Dry, Fast, and Brutal Test (page A11): Competing in the British Open is a high-anxiety enterprise. That’s part of the point of a major—to test the players’ mental mettle as much as their technique. But through two rounds of this year’s edition, the stress and frustration levels are higher than ever. The Muirfield links, by definition windy, seaside and largely treeless, are as brown, baked and bounding as at any Open since Hoylake in 2006. Unlike at that event, which Tiger Woods won deploying his driver only once, the rough at Muirfield is more severe and the greens are faster. Phil Mickelson said the greens are running quicker than those at Augusta. Brandt Snedeker said the fairways in spots are running at 15 feet on the Stimpmeter. That also is faster than the greens at Augusta. Wind-aided five-iron shots here are rolling out to 300 yards, often in unpredictable directions. The greens are so slick that world No. 2 Rory McIlroy putted into a bunker en route to his disastrous 79 Thursday, while Mickelson and Snedeker, among the world’s top short-game artists, both three-putted from 4 feet in the late going Friday. For Mickelson, that third putt (on the 16th) was actually his fourth on the hole. But just getting within putting distance is a huge challenge. “I don’t know what you’re supposed to do to hit a green,” Snedeker said. “It’s beyond anything I’ve ever played in.” The R&A, which puts on British Opens, is actually rather pleased with the way Muirfield is playing. “We’ve got the conditions here that we really like to have: hard, fast, running conditions,” said Chief Executive Peter Dawson. This year’s Open, unusual because of the preceding fortnight of heat and no rain, is links golf carried to the nth degree. It’s the ultimate test of both golf and character, more so even than all but a few U.S. Opens, traditionally considered the toughest of golf’s four majors. The U.S. Open tests specific shots with outcomes, but the British Open tests best-guess shots whose known outcomes are dicey even when the player hits exactly the shot he wants. It requires a mind-set that only experience and deep self-confidence can supply. Bad Day for Tech Titans (page B1): Investors have spoken: Big technology companies are missing the boat. Shares of Microsoft Corp., and to a lesser extent Google Inc., were hammered Friday as investors hit the panic button on earnings disappointments from tech giants. Microsoft shares dropped 11.4% to close at $31.40 after the company showed it couldn’t outrun a long falloff in personal-computer sales. The swoon cost Microsoft investors a collective $34 billion in a single day. Shares of Google dipped 1.6%, or $14.08, to $896.60. Hewlett-Packard Co.’s shares fell 4.5% as investors absorbed the potential ripple effects of Microsoft’s earnings results. The downdrafts underscore how investors are punishing companies that aren’t keeping up with tectonic shifts in consumer- and business-technology habits. People are relying more on their mobile phones and tablets for computing tasks, and waiting longer to replace aging PCs. Meanwhile, corporations are revolting against older types of technology in favor of Internet-based services. Manufacturers’ Dose of Cheer (page B3): Amid concerns about the strength of key economies around the globe, America’s biggest manufacturers have found some unexpected signs for optimism. General Electric Co. andHoneywell International Inc. each reported stronger results out of Europe, rising orders from China and bright spots in a sluggish U.S. economy when they delivered their second-quarter earnings reports Friday. Neither company was ready to declare a global economic recovery, but their results didn’t bear out the gloomiest forecasts, either. ‘Junk’ Jumps as Bonds Boom (page B5): Bonds issued by low-rated U.S. companies are making a sound recovery from their spring swoon, in the latest sign investors remain thirsty for income-producing investments. Yields on noninvestment-grade corporate debt fell below 6% at Thursday’s close for the first time since June 4, hitting 5.89%, according to a Barclays index. While that is well above the 5% threshold the debt briefly pierced in a frantic early-spring rally, the milestone comes only weeks after yields on so-called junk debt neared 7%. Yields fall as prices rise. Fueling the bounce: improved investor sentiment. The prices of Treasury bonds, to which corporate debt is tethered, have risen amid reassurances by Federal Reserve officials that the central bank is in no hurry to curtail its $85 billion monthly bond-buying program. S&P 500 Hits Peak Despite Tech’s Woes (page B5): The Standard & Poor’s 500-stock index inched up to a fresh record Friday, capping its fourth-straight weekly gain, though disappointing earnings from Microsoft and Google weighed on the tech sector. The S&P 500 rose 2.72 points, or 0.2%, to 1692.09. The Dow Jones Industrial Average eased 4.80 points, or less than 0.1%, to 15543.74, after notching its own all-time high Thursday. The Nasdaq Composite Index declined by 23.66 points, or 0.7%, to 3587.61. Can Market Timers Beat the Index? (page B7): If you think you will know it when this bull market finally comes to an end, you are kidding yourself. The vast majority of professional advisers who try to get in and out of the stock market at the right time end up doing worse than those who simply buy and hold through bull and bear markets alike. Even those few who beat a buy-and-hold strategy during one period rarely beat it in the next one. What makes you so confident you can do better? A surer strategy is to keep a steady allocation through thick and thin. If you are frightened by the prospect of another bear market, then you should reduce your equity holdings now to whatever level you would be comfortable holding through one. Though that means you will miss out on gains if the market keeps rising, odds are that you will more than make up for it by losing less in the next bear market. Dan Ariely: Ask Ariely (page C12):

  • Should we live in the city close to work, or farther away where it is cheaper?
  • What is the best way to inject some rationality into decision making?
  • What do you think about democracy?

Namaste on Demand (page D12): Nothing bursts my post-yoga bliss quite like the realization that, with travel time factored in, my Vinyasa class has eaten up four hours of a precious Sunday. But the more efficient alternative—rolling out a yoga mat in the living room and popping in the same instructional DVD I’ve watched 30 times already—can get old quickly. How does one find motivation for the same workout and the instructor’s same stale jokes? Online yoga classes, which stream live and prerecorded lessons from a vast, constantly updated menu, offer a more practical and less repetitive path to relaxation. They let me work on my downward dog whenever the mood (and lull in my schedule) may strike. I simply perch my laptop on a chair, load the appropriate website and get down to business. Of the dozen or so different services that I tested, not all had me contentedly chanting om. A few went overboard on the new-age front (think soft-focus waterfalls and close-ups of bulging-eyed frogs). Others, like Hulu’s free yoga channel, were interrupted by Häagen-Dazs ads every few poses. But the good ones turned out to be very good indeed. Although actually reaching nirvana amid the bustle of my own household turned out to be easier said than done (what with the pets wandering in to stretch out on the mats and the children shouting demands for milk or television), my three favorite yoga-streaming websites gave me the foundation to try, and try again.

  • YogaGlo
  • Yogis Anonymous
  • YogaVibes

Spring in Your Step, and Then Some (page D12): It would be a stretch to call Adidas’s new Springblade running shoes “spring-loaded,” but that description comes fairly close to the feeling of wearing them. Each pair perches you on 32 polymer blades designed to flex just enough to help propel you forward when you run. We found that the sneakers provide a subtle but startling sense of buoyancy, even when you’re walking. adidas_springblade

The Wall Street Journal: Friday, July 19, 2013

Record Bankruptcy for Detroit (page A1): The city of Detroit filed for federal bankruptcy protection Thursday after decades of decline, a new low for a city that once defined industrial America’s might but was hollowed out by the flight of residents and businesses to the suburbs. The filing by the automobile capital and onetime music powerhouse—which has liabilities of more than $18 billion—is the country’s largest-ever municipal bankruptcy case. The move to restructure the debt is bound to set off months, if not years, of legal wrangling, asset sales and cuts to benefits for Detroit workers and retirees, including 20,000 on city pensions. Owners of the city’s bonds are expected to battle with retirees and others for pieces of the city’s diminished wealth.

Microsoft: Another Big Miss (page B1): Microsoft Corp. took a $900 million charge on its high-profile Surface RT tablet, contributing to fourth-quarter results that sharply missed revenue and profit expectations. The software giant also cited the effects of the soft personal-computer market in its quarterly report Thursday. Excluding the Surface write-down, it posted earnings of 66 cents a share, well below Wall Street estimates of 75 cents, while revenue came in at $19.9 billion, compared with analyst expectations of $20.7 billion. The company’s shares tumbled 6.3% in after-hours trading to $33.22, off $2.22. The results showed how Microsoft, still a vastly profitable company, remains stymied in its efforts to adapt to a range of new computing platforms and approaches. Despite significant wagers on the Surface and overhauled versions of its Windows software, consumers have proved largely impervious to Microsoft’s products and massive marketing campaigns behind them.

So What’s the Matter with Shale Gas, Anyway (page B1): Sometimes it seems as if the environmental movement has been left behind by the sheer speed of America’s shale energy revolution. That may be because a resource—natural gas—that environmental groups once saw as part of the solution has become part of the problem, at least as they see it. Shale gas and oil are widely viewed as one of the biggest forces to hit the U.S. economy in modern history. Total U.S. gas production has rocketed 33% since 2008 and oil 46%, driving down energy costs. The expanding shale industry supported 1.7 million jobs in 2012 and produced $62 billion in state and federal tax revenue, according to IHS/CERA, the energy consultancy. “The new narrative about shale gas is about jobs, economic growth, global competitiveness, and a U.S. manufacturing renaissance,” says Dan Yergin, the energy expert and author of “The Quest.” The public gets the narrative. A Pew Research poll found 48% of respondents favor increased use of hydraulic fracking of shale; 38% are opposed. Where does this leave the environmental movement? Trying to change the conversation about shale gas. For years, environmental groups saw gas as something of an ally in the cause. Gas has half the carbon footprint of coal. It was the ideal substitute for coal and a “bridge” to greater use of renewable energy such as wind and solar. But as shale gas production soared, the price of natural gas plummeted. Environmental groups now worry that gas is moving in to stay, taking the momentum out of the shift to nonpolluting renewables, slowing conservation, and creating new environmental problems.

Google Ad Prices Fall (page B3): Google Inc.’s profit and sales continued to climb in the recent quarter, but deceleration in the growth of its main business of selling search advertising reignited concerns about the impact of mobile devices and the Web giant’s push into lower-margin businesses. The results were lower than what Wall Street was expecting, sending the company’s shares lower in after-hours trading.

Chipotle Posts Profit Rise (page B3): Chipotle Mexican Grill Inc.’s second-quarter profit rose 7.6% as the burrito chain reported a jump in sales tied to increased customer traffic and an extra day in the quarter. Chipotle also boosted its full-year same-store sales outlook and now expects growth in the low to mid-single digits, compared with its prior view for flat-to-low-single digit growth.

Thursday’s Markets: Financial Shares Give Lift (page C4): Stocks notched another record, helped by strong readings from the U.S. labor market and manufacturing sector. Financial shares led the gains, as Morgan Stanley was the latest Wall Street bank to report strong earnings. The Dow Jones Industrial Average rose 78.02 points, or 0.5%, to 15548.54. The Standard & Poor’s 500-stock index tacked on 8.46 points, or 0.5%, to 1689.37. Both indexes closed at records.

Bond Investors Prove Demanding (page C4): The surge in U.S. interest rates is making corporate-debt buyers more demanding, in a move that stands to raise borrowing costs for some large firms. Since Federal Reserve Chairman Ben Bernanke said the central bank was prepared to step back its extraordinary support for the economy, the yield premium, or spread, on investment-grade corporate bonds has risen as high as 1.54 percentage points above comparable Treasury debt from 1.3 points on May 22, according to Barclays PLC. The yield on the 10-year Treasury note rose to 2.536% on Thursday from 1.61% in early May, in what would normally be a salutary shift for bonds issued by prosperous companies. As bond yields rise, prices fall. Rising long-term rates typically indicate the economy is improving, incomes are increasing and corporate defaults are less likely, trends that tend to reduce the premium that investors demand to buy the debt. Narrower premiums are a boon both for bond investors, who benefit from rising corporate-debt prices, and for large companies, which enjoy lower fundraising costs.

Blackfish: Movie Review (page D4 – scroll down): At the center of a swirl of claims and counterclaims in this enthralling documentary stands a chilling fact. An experienced trainer at Florida’s SeaWorld, Dawn Brancheau, was killed three years ago by a killer whale named Tilikum that had killed two people before her. Gabriela Cowperthwaite’s film makes a persuasive case against the park, which rejects all of the charges and denies all suggestions of negligence. More persuasively still, “Blackfish”—an Indian name for orcas—argues against the very concept of quasiamusement parks like SeaWorld that turn giant creatures meant for the wild into hemmed-in, penned-up entertainers.

The Dice Gets the Role (page D5): Andrew Dice Clay calls himself “the most vile comic ever to walk on a stage.” He became a rock star of stand-up comedy in the late 1980s as a filthy-mouthed braggart, selling out Madison Square Garden telling vulgar versions of nursery rhymes. He was vilified by women’s groups and gay groups for his material. Woody Allen came up in comedy in the early 1960s as a self-effacing intellectual. He joked that he was kicked out of New York University for cheating on his metaphysics exam, after being caught looking into the soul of the student sitting next to him. Yetthe first unlikely creative collaboration between the Woodman and the Diceman really has gone well. In Mr. Allen’s new film “Blue Jasmine” (due July 26), Mr. Clay plays Augie, a well-intentioned, blue-collar ex-husband. His role supports stars Cate Blanchett and Alec Baldwin.

So Simple Nobody Can Stop It (page D9): National Football League coaches report to training camp next week in a state of puzzlement. They have no earthly idea how to defend the option. Never mind that NFL coaches are regarded as the greatest minds in professional sports, and that the option dates back to the Truman Administration. When an NFL quarterback takes the snap and runs, the league’s best defensive coaches tend to hide behind their clipboards. It’s enough to induce laughter in the film room afterward. Coaches “don’t know what they are doing,” said Tony DeMeo, a longtime college coach who now advises other coaches on the option. “Pro coaches have not studied it hard enough,” said Ted Sundquist, a former NFL general manager who learned to stop the option while an assistant at Air Force in the 1980s. Watching NFL defenses succumb to option-induced paralysis, “I sit back and laugh,” he said. The problem, actually, is less bafflement than arrogance. The option, after all, is a staple of the college game. It’s how the Cornhuskers and Sooners won national championships. By contrast, NFL coaches have long regarded their quarterbacks—and the opponents’ quarterbacks—as too precious and fragile to risk running with the ball. “Everyone in the NFL has been stubborn,” said Denard Robinson, the Jacksonville Jaguars’ running back who broke rushing records as a quarterback at Michigan. But ignoring the option is no longer an option. The number of runs by NFL quarterbacks rose to 1,587 last year, up 20% from five years ago. And that doesn’t include the many times a running quarterback exercised the option of pitching the ball to a running back.

The Rise of the Young Buyer (page M1): A growing group of wealthy young buyers are making inroads in the world of high-end real estate, acquiring properties at prices, and at a pace, that brokers say they have never seen before. Real-estate agents say that young people are buying more expensive homes than previously. They are also more likely to buy several properties, and use one as an investment. Buying real estate has grown more attractive, these young buyers say, compared with the stock market, which appears riskier to a generation that entered the workforce during a market correction. In recent years, low interest rates coupled with lower real-estate prices had also made it easier for people in their 20s and early 30s—whom demographers refer to as “Generation Y” or “millennials”—to buy.

The Wall Street Journal: Monday, July 15, 2013

China Slump Ripples Globally (page A1): As the numbers pile up showing China’s sizzling growth cooling down, industries world-wide—from German paper-cutter makers to Indonesian palm-oil exporters—are confronting an altered landscape of winners and losers. The ones that benefited the most from China’s rise are now being hurt. Others, aiming at China’s 1.3 billion consumers, are faring better. Growth in China, the world’s second-biggest economy after the U.S., has been slowing since 2007’s peak, but that slowdown has accelerated recently. China’s second-quarter gross domestic product released early Monday showed the economy expanded 7.5% from the year earlier, slower than the 7.7% growth in the first quarter. That matches the government’s full-year growth target of 7.5%, a rate that would make this year the slowest since 1990. Some economists figure China will grow even slower than that.

Business Confidence Declines in Survey (page A8): Businesses around the world became more gloomy about their prospects in June, an indication that they are unlikely to increase their investment spending and hiring, hindering a so-far tepid and patchy economic recovery. Of 11,000 manufacturers and services providers in 17 countries surveyed between June 12 and 26, the proportion expecting an increase in activity over the coming 12 months exceeded the proportion expecting a decline by 30 percentage points—down from 39 percentage points in February, data-analysis firm Markit said. The slipping business confidence is the latest indication that there is unlikely to be a substantial pickup in global economic activity this year. When businesses are confident that future activity will increase, they typically invest in new equipment and hire workers, in turn driving a rise in economic output. The International Monetary Fund last week cut its forecast for global economic growth this year to 3.1% from 3.3%, citing slowdowns in some large developing economies, as well as the euro zone’s struggle to emerge from the region’s longest postwar contraction. Markit said the decline in business confidence was most notable in the U.S. and China, with smaller declines recorded in the euro zone and Japan.

The Plight of the Teenage Pretzel-Heads (page A10): Mixed messages about the value of education and hard work are causing some twisted thinking. New York Mayor Mike Bloomberg got it right the other day when he encouraged kids to think about forgoing college and becoming plumbers instead. Not everyone needs to go to college. After all, what’s wrong with plunging those toilets? You get good at the job, do it for a few years, and maybe you open your own plumbing business and hire people to work for you. Sometimes it seems like America has lost sight of the kind of entrepreneurship that elevated the nation from a colony to the world’s superpower. Young people today are independent-minded and entrepreneurial. The problem is they don’t know what that means. Entrepreneurship does not equal innovation. It doesn’t necessarily mean creating the next Twitter—though it could. Entrepreneurship is the carpenter laying a foundation, the electrician fixing a lamppost, the ice-cream man pushing his product in the middle of July. It’s building upon hard work, experience, success—and even failure—to create opportunities for yourself and others. I suspect that it’s also the cure for Pretzel Head.

Poof! It’s J.K. Rowling (page B1): J. K. Rowling had more magic up her sleeve after all. Over the weekend the Sunday Times (London) disclosed that she is the author of “The Cuckoo’s Calling,” a well-reviewed crime novel issued in April under the pseudonym Robert Galbraith. The book, which features a private investigator named Cormoran Strike, who lost a leg in Afghanistan, quickly zoomed up the charts Sunday after Ms. Rowling was identified as the writer. The author had originally been described as having served in the military, where his experiences helped shape the novel.

Microsoft Cuts Price of Its Surface Tablet by Up to 30% (page B3): Microsoft Corp. has cut the price of its Surface RT tablet by $150, or as much as 30%, as even some Microsoft partners have called the device a sales laggard. The software company’s websites on Sunday began showing a price of $349 for the least-expensive model of the tablet, without a cover that doubles as a keyboard for the device. That model, which launched last fall, previously cost $499 without the cover-keyboard combination. Microsoft also cut the price on the Surface RT model with twice as much memory to $449 from $599. That version, with a type of cover-keyboard combination, now costs $549, down from $699.

Emerging Markets Beckon (page C1): The recent rout in emerging markets is enticing some investors to jump back in to search for cheap stocks, bonds and currencies. But the selloff is prompting these bargain hunters to be a lot pickier than in the past. Markets from Brazil to China have tumbled since mid-May amid growing expectations that the U.S. Federal Reserve is preparing to end its $85 billion in monthly bond purchases. That would shut off a flow of easy money into emerging markets just as prospects for economic growth in some of them have begun to dim. On Tuesday, the International Monetary Fund cut its outlook for the global economy in 2013, citing flagging growth in emerging markets as a major reason for the downgrade. Investors who are buying have a different take. They say two months of outflows have cleared away much of the “hot money”—from hedge funds and other investors with a short time frame—that had pushed asset prices higher. They see little change to what attracted them to these markets in the first place: faster growth and higher yields than can be found in the developed world.

Netflix Should Read Amazon’s Script (page C1): It turns out ’13 has been lucky for Netflix. The stock has surged 178% so far, the best performance in the Standard & Poor’s 500-stock index. But to keep the odds in its favor, the video-streaming and DVD-rental company will need to be more like an than an HBO. Netflix’s paid domestic streaming subscriber base has increased to nearly 28 million from 25.5 million at the start of 2013 and 22 million a year before. This puts it just below Time Warner’s HBO. Meanwhile, Netflix’s domestic streaming margin on the basis of contribution profit, revenue less cost of sales and marketing, was 20.6% in the first quarter, up strongly from 14.3% a year earlier. But expanding margins may represent a risk for Netflix. That sounds counterintuitive. But when Netflix reports second-quarter earnings on July 22, investors will be more focused on how many subscribers it added, something that may require extra spending. For Netflix, building a formidable subscriber base should be a more immediate concern than raising margins. Having more users enables Netflix to spread the costs of buying and creating new content. And rising market share should help it raise subscriber fees. Considering the stock’s recent performance and the mounting evidence of its potential, investors are likely to give Netflix a free pass on margin growth for the time being if it can keep its subscriber numbers climbing. That leeway can itself be a competitive advantage: Just look at rival Amazon, which has used razor-thin margins to dominate retail, all with Wall Street’s apparent blessing. It is notable that, at 176 times 2013 earnings, Netflix’s valuation is already approaching Amazon’s 200-plus level.

Verizon Wireless’s iPhone Commitment (page C8): Is the iPhone becoming the smartphone world’s Alex Rodriguez? One data point suggests the aging all-star device may be struggling to put up the sales numbers to justify its gigantic contract. Like some rivals, Verizon Wireless appears to have made a multiyear, multibillion-dollar commitment to buy iPhones in order to get Apple’s smartphone onto its network. Now, the No. 1 U.S. carrier by subscribers doesn’t appear to be selling as many of the devices as it thought it could. That’s judging from Verizon Wireless’s ballooning purchase commitments as reported by one of its corporate parents, Vodafone Group. In the short term, any shortfall could mean Verizon Wireless faces some sort of contract penalty. More important will be the likely impact on future contract negotiations with Apple. Verizon Wireless, which is also part-owned by Verizon Communications, hasn’t disclosed the terms of its Apple deal. But Moffett Research points to a footnote in Vodafone’s filings detailing the division’s commitments to purchase equipment from companies such as Apple.

The Wall Street Journal: Friday, July 12, 2013

Stocks Surge to Fresh Highs (page A1): A burst of investor optimism pushed U.S. stock indexes into record territory for the first time since late May, fueled by fresh reassurances that the Federal Reserve would continue to pour cheap money into financial markets. Thursday’s rally began during Asian trading hours before spreading to Europe and North America. Gains were sparked by Fed Chairman Ben Bernanke’s comments late Wednesday that the Fed’s easy-money policies are in place for the long haul. Thursday’s rally lifted both the Dow Jones Industrial Average and Standard & Poor’s 500-stock index through records hit in May, before the latest round of stimulus concerns bubbled up. The Dow climbed 169.26 points, or 1.1%, to 15460.92. The blue-chip benchmark has climbed 18% this year and is up 23% from where it stood one year ago. The Nasdaq Composite Index closed at its highest level since September 2000, but remains well below its all-time high hit earlier that year.

Hospitals Prescribe Big Data to Track Doctors at Work (page A1): California’s MemorialCare Health System is part of a movement by hospitals around the U.S. to change how doctors practice by monitoring their progress toward goals, such as giving recommended mammograms. It isn’t always an easy sell. At one clinic earlier this year, physicians grilled Dr. Baker, who is director of performance improvement at a MemorialCare-affiliated physician group. Cardiologist Venkat Warren said he worried that “some bean-counter will decide what performance is.” He wondered whether doctors would be pushed to avoid older and sicker patients who might drag down their numbers. “If it isn’t cost-cutting, what is it?” Dr. Warren asked. “It’s providing better value,” Dr. Baker responded.  Encounters like these are one result of the changes sweeping American health care. Technology is making it easier to monitor doctors’ work as patients’ details are compiled electronically instead of on paper charts. Software makers are selling new tools to crunch the data. Software called Crimson offered by the Advisory Board Co. now includes information on more than a half-million doctors, up from fewer than 50,000 in 2009.

U.S. and China to Pursue Investment Treaty (page A7): Senior U.S. and Chinese officials agreed Thursday to restart stalled negotiations to reach an investment treaty between the world’s two largest economies that could dramatically expand business opportunities for both countries. The deal could open up more than 100 Chinese industries to investment by U.S. businesses, such as automakers, banks, and chemical and energy companies, that face restrictions on investment in that country’s fast growing economy. Chinese companies would win smoother access to the U.S., though both nations are expected to keep some strategic sectors, such as defense, off the table.

Vouching for Tolerance at Religious Schools (page A11): Like much of the Democratic Party leadership, Mr. Obama supports allowing families to use public funds to attend the school of their choice, including charter schools, but strongly opposes the inclusion of private religious schools among the options. Opponents of voucher programs that include religious schools often cite “separation of church and state” concerns. But constitutional objections to public funds flowing to religious schools were removed by the Supreme Court’s ruling in Zelman v. Simmons-Harris a decade ago. The court held that vouchers pose no constitutional threat if the money goes to religious schools by parents’ choice rather than directly from the state. Vouchers represent government support for education—whether that education occurs in a religious setting or not is up to parents. Perhaps the president and other Democrats oppose vouchers because they fear—as the president’s remarks in Ireland suggest—that religious schooling undermines social cohesion. The belief that religious schools erode civic goals has a long history. In the mid-19th century, religious schools, Catholic schools in particular, were accused of reinforcing separate identities rather than shared American values. Much has changed in education since then, but a suspicion lingers in some quarters that church-operated schools breed intolerance. Yet this view has been contradicted by a growing body of social-science evidence.

Ballmer Solidifies Grip on Microsoft (page B1): Microsoft Corp.’s broad reorganization announced Thursday aims to break down internal fiefs that have slowed product development and caused friction among teams of employees. The long-awaited moves are designed to help the tech giant become a different kind of company, known less for programs that people buy than for devices and services that require software. But the new structure also appears to reinforce the control of Chief Executive Steve Ballmer without clarifying who is his No. 2 at Microsoft. The company said it will shift from largely autonomous product groups to a more horizontal structure, under which managers who will oversee specific kinds of functions like engineering, marketing and finance.

Clearance Racks Give Lift to Retailers’ Sales (page B2): Retailers’ sales continued to heat up in June amid improving weather and discounting as the chains looked to clear out spring merchandise and prepare for the back-to-school season. One standout was Gap Inc., which continued to record strong sales. Its same-store sales growth of 7% handily topped expectations. Gap stores posted a 5% rise when 6.3% growth was expected, while Banana Republic’s same-store sales declined 1%, compared with expectations for 0.7% growth. Old Navy recorded 13% growth, well ahead of expectations for 5.4% growth. While general-merchandise retailers such as Costco Wholesale Corp. and Fred’s Inc., reported strong results for June, specialty retailers, including L Brands Inc., missed market expectations. Discounters showed strength. That suggests overall consumer spending is improving but shoppers are still holding back on discretionary purchases.

Tide Pod Package: No More Candy Jar (page B6): Procter & Gamble Co. is making further changes to the packaging of its Tide Pods laundry-detergent pouches, as reports of young children accidentally ingesting small packets of concentrated detergent continue to climb. The Cincinnati, Ohio, consumer-goods giant said Thursday it will sell the single-use laundry pods in plastic tubs and bags that are completely opaque, moving away from transparent containers that resembled candy bowls. Last year, following reports that some children were mistaking the colorful detergent pods for candy, P&G added a double-latch lid to the tubs, making them more difficult for children to open. The additional steps suggest those moves may not have been adequate.

Old packaging...

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New Glass-Steagall Is Urged (page C3): Sen. Elizabeth Warren (D., Mass.), one of Wall Street’s most outspoken critics, is putting her populist muscle behind a bipartisan bill to reinstate Depression-era laws separating plain-vanilla banking activities from riskier investment-banking bets. On Thursday, Ms. Warren launched a Twitter campaign to rally support for the bill with the motto “Banking Should Be Boring.” She held a briefing with reporters to discuss “the 21st Century Glass-Steagall Act,” a reference to the 1933 statute that separated commercial- and investment-banking activities before being repealed in 1999.

Play Ball…Please! (page D1): By WSJ calculations, a baseball fan will see 17 minutes and 58 seconds of action over the course of a three-hour game. This is roughly the equivalent of a TED Talk, a Broadway intermission or the missing section of the Watergate tapes. A similar WSJ study on NFL games in January 2010 found that the average action time for a football game was 11 minutes. So MLB does pack more punch in a battle of the two biggest stop-and-start sports. By seven minutes.

In Defense of Baseball’s Lazy Pace (page D2): An entire school of baseball aficionados locate the beauty of the game in its lack of a clock. By freeing us from the constraints of time, they argue, a ballgame offers transcendence. “What these people don’t understand,” baseball historian Bill James once wrote, “is that, until about 1945, baseball did have a clock. It was called the sun.” Baseball, it is true, isn’t a game of constant motion, and if you put a stopwatch to it you’ll find that most of a game is spent waiting. All that waiting, though, is caused by and allows for the two best things about baseball: It is a game of incredible precision, and it is the one game you really don’t have to pay any more attention to than you would like.

After the Unthinkable: a Movie Review of ‘The Crash Reel” (page D6): Films that exceed expectations come and go, leaving audiences properly grateful, if not for much. Then there’s a documentary like “The Crash Reel”—HBO’s documentary about Kevin Pearce, a star athlete whose career was cut short by a critical brain injury—which goes flying past all the clichés and treacle-soaked heroics embedded in this theme to a wondrously hard-edge life all its own. No small achievement when you consider that it’s a life that draws virtually all of its power from the film’s singular portrait of family bonds.

Buy Now, Look Later (page M1): One real estate developer hired a drone; another displayed life-size sculptures of polar bears. A third charged potential buyers $100,000 just to take a peek at the floor plans. The common goal: selling something that doesn’t exist. Spurred by tight inventory and plenty of interest from foreign buyers, real-estate developers in cities such as New York and Miami are reviving the boom-era practice of pitching new buildings months—and even years—ahead of completion.

Domestic Bliss in a Home Bar (page M3): Sometimes all it takes is a really good home bar to overcome a fear of commitment—at least when it comes to real estate. Dean Soll thinks of houses as temporary shelters, not lifelong homesteads. So when he and his wife, Carla, bought their 6,900-square-foot, six-bedroom home in Coto de Caza, Calif., three years ago, he was already thinking about where they would move next after their last child went off to college and they didn’t need all that space. Mrs. Soll was having none of that. Having endured four moves in the 23 years they’d been married, she didn’t want to budge. To get her husband to stay put, she agreed to let him convert one of the rooms in their traditional gray-stucco house into a fantasy home bar—giving him full control over the scope, design and cost of the project. “I said if it’s going to give me another five or eight years then let’s do it,” said Mrs. Soll, 48. “My dream is just to stay here.” The result is a $350,000, full-size, commercial-grade barroom—the kind that is usually found off the lobby of a high-end boutique hotel.

The Wall Street Journal: Monday, July 8, 2013

Earnings in Spotlight As Fed Jolt Fades (page A1): After Friday’s stronger-than-expected U.S. jobs report, investors are more convinced than ever that the Federal Reserve’s bond-buying program will be scaled back as soon as September. If that happens, the stock market will lose fuel that helped power the Dow Jones Industrial Average to a new high in May. Investors hoping that U.S. companies will come to the rescue are likely to be disappointed, according to analysts who have been trimming their expectations in recent weeks.

U.S. Trade Talks Gear Up, Putting Heat on China (page A2): The U.S. is launching broad trade talks with Europe this week and preparing for the next stage of negotiations with select Asia-Pacific nations, part of the Obama administration’s effort to find new fuel for economic growth. U.S. trade experts and business leaders say they expect the deals will also put pressure on the only major economy absent from the negotiating tables: China.

Survivor Updates in 140 Characters (page A7): Many anxious people trying to track the fate of passengers on Asiana Airlines Flight 214 didn’t get it from conventional media, but from the real-time tweets of a Samsung Electronics Co. executive. The postings on Twitter Inc.’s service by David Eun, who walked away from the crash-landing Saturday at San Francisco International Airport, were among the first signs that most people survived despite TV images of flames engulfing the fuselage of the wrecked Boeing 777. “I just crash landed at SFO. Tail ripped off. Most everyone seems fine. I’m ok. Surreal…” read Mr. Eun’s first tweet. Mr. Eun is well-known in Silicon Valley, having previously worked at Google Inc. and AOL Inc. He was hired in 2011 to help the South Korean electronics giant create more media offerings. In his Twitter profile, he describes himself as “Consumer Internet/Digital Media guy. Father, All-American Korean, Virginian and converted NYer, frequent flier, Vikings fan, squash player, pensive optimist.”

Fresh Questions Loom for Euro Zone (page A14): Euro-zone officials are preparing to confront a fresh test in the region’s debt crisis: finding yet more financing for Portugal, Greece and Cyprus on top of more than €200 billion ($256 billion) the bloc already has devoted to bail out its weakest members. Euro-zone tension has flared of late, after several months of relative calm, with Portugal’s political crisis last week, with tricky negotiations coming to a head over releasing more aid to Greece and with evidence the Cypriot economic program is veering off track. These developments, coming ahead of a meeting of euro-zone finance ministers Monday, underlined that some of the euro zone’s troubled economies will need more financial help, even as some concerns eased over the weekend.

Horseless Carriages to Driverless Cars (page A15): Digital innovation usually happens in the virtual world, from apps for tablets and mobile phones to the latest in social media. Over the next few years, one of the biggest technological changes will be in the real world of driving a car. Or being driven by one. The largely self-driving car is no longer just a vision, thanks to rapid advances in lasers, radar, GPS and mapping databases. If it weren’t for fear among innovators of getting too far ahead of U.S. laws and regulations, there would already be cars on the road doing almost as much driving as humans. California, Nevada and Florida made it legal to operate self-driving cars on public roads two years ago. Google’s fleet has since traversed more than 435,000 miles in cities and on highways without causing an accident. Still, regulators are nervous. During congressional hearings in May, Sen. Jay Rockefeller (D., W. Va.) cited the possibility of cyberattacks: “Can some 14-year-old in Indonesia figure out how to do this and just shut your car down?” In June, the U.S. Department of Transportation applied the brakes, invoking the National Highway Traffic Safety Administration’s power to regulate vehicle safety. The federal rules let states allow limited tests of self-driving cars, but no sales. It’s natural that people are nervous about self-driving cars. Horseless carriages, as the first cars were called, also took time to be accepted. Consider this account of a first drive, from a magazine called The Horseless Age, in 1897: “There is a sense of incompleteness about it. You seemed to be sitting on the end of a huge pushcart, propelled by an invisible force and guided by a hidden hand. There is also a seeming brazenness to the whole performance. I dreamed once that I walked down Fifth Avenue in my pajamas in the full tide of the afternoon promenade, and I almost died with shame before I awoke. Yesterday I had something of the same feeling as I sat there and felt myself pushed forward into the very face of a grinning, staring and sometimes jeering New York. But it wore away after a while. Gradually I felt that I did not need the protection of a horse in front of me.”

The Economy Needs More Spending Now (page A17): On the proverbial list of top 10 reasons for poor economic policy, politics occupies about the first six places. But around seventh or eighth place there is a conceptual confusion that sounds pedantic but is highly consequential. I refer to the failure to distinguish between the short-run and long-run effects of particular policies, which are often starkly different. The most prominent recent example is the battle over reducing the federal budget deficit. Some say lower deficits are essential for economic growth; others say reducing the deficit will damage growth. Who’s right? Actually, they both are. It depends on the time frame. In the short run, deficit reduction slows growth by cutting the economy’s total spending. After all, to reduce its deficit, the government must spend less itself or tax people more. This year, the tax hikes and government spending cuts agreed to in January and before are probably reducing GDP growth by about 1.5-2 percentage points. Think about that. The U.S. economy is struggling to achieve 2% growth this year. Without the fiscal self-punishment, we might be humming along at closer to 4%. Yet you hear every day that large budget deficits threaten growth. How can that be? The answer is that, in the long run, a larger accumulated public debt probably spells higher interest rates, which deter some private investment spending. Economies that invest less grow less. Thus, paradoxically, reducing the budget deficit probably hurts growth in the short run but helps it in the long run. What explains this paradox?

Hollywood Feels Netflix’s Influence (page B1): The resurrection of “The Killing” shows how Netflix is shaking up Hollywood, spurring media companies to experiment with new ways of doing business and changing the economics of producing some types of programming. TV and film studios once saw Netflix simply as a way to make some extra money licensing older shows and movies. Now, they view the streaming site as a potential financier, a launch pad for original shows and an aggressive buyer of some programming that is less valuable in the TV world. In the process, Netflix, along with other digital-video rivals, has become a significant driver of media-industry profit growth. Big media companies generated about $1.6 billion of revenue last year from licensing their content to such services. Though that represents just 1% of their aggregate revenue, it accounts for a large percentage of operating-income growth, according to Bernstein Research. But there are tensions, too. Netflix has gotten more demanding on exclusivity in the face of growing competition from Inc. and other outlets, and more finicky about what it will carry.

Car-Driving Technology Firm Is Valued at $1.5 Billion (page B3): Mobileye NV, a maker of image technology used to help drivers see and manage traffic risks, is raising $400 million in a deal that values the company at $1.5 billion and has attracted some large U.S. investors. Amid growing interest in technology-assisted driving, Mobileye’s system is available in some models from General Motors Co. and BMW AG, helping warn drivers of oncoming cars or pedestrians. With its headquarters in the Netherlands and with operations in Israel, the company aims to be among the pioneers behind semiautonomous-driving vehicles.

At Long Last, Murray Gets It Done (page B8): There are two ways a champion arrives. The first way is sudden, premature, almost shocking. Talent rushes in, and talent cannot be denied. It happens so fast the young champion can’t really process what has happened, how hard this accomplishment is, what it all means. The second way a champion arrives is much harder. It takes time, more than expected. There is suffering. Agony. Public doubt. Self-doubt. Failure steps inside the head, folds bedsheets in the brain. The possible begins to curve toward impossible. There are moments when it starts to feel like it will never happen. And then something changes. And it happens. This is Andy Murray. Andy Murray won Wimbledon Sunday, beating Novak Djokovic in straight sets, 6-4, 7-5, 6-4. The second-seeded Murray, No. 2 in the world, overcame a brief but furious third-set rally from world No. 1 Djokovic to capture his first men’s singles title at the All England Club. And yet this is so much more than that. Andy Murray winning Wimbledon isn’t a story; it’s a saga, complicated by Murray’s own internal roller coaster and the crushing pressures of a hungry nation, eager for a title. Murray, a Scot, becomes the first British men’s player to take Wimbledon in 77 years—a heavy assignment given to Murray as a teenage phenom, finally completed at 26, but not before many disappointments and unravelings. There was a Charlie Brown quality to Murray’s quest, all of the exasperation and near-misses. A year before Murray had taken runner-up to Roger Federer here, and in the trophy ceremony he had emotionally pledged: “I’m getting closer.”

Microsoft’s Products Need More Horsepower (page C6): Microsoft keeps hitching its fortunes to lame horses. It shows how rickety parts of the software giant’s business are. Barnes & Noble, Best Buy, Nokia, Yahoo and Dell all face very difficult circumstances of their own. While Microsoft’s deals with most of them make sense, its relatively unpopular products and a changing competitive environment mean they may not prove particularly fruitful. Start with Microsoft’s troubled mobile business. One big strategic challenge has been getting smartphones powered by its operating system, Windows Phone, into the market. Its first big deal to address this saw it agreeing to pay Nokia $250 million a quarter to make Windows Phone its primary smartphone platform. That isn’t much money for Microsoft, and it is mostly offset by royalties Nokia pays back. But Microsoft’s traditional business model revolves around the company being paid by gadget makers for using its software, not the reverse. Microsoft needs to make concessions to help Windows Phone build momentum, sure. Yet it is hard to see payments ever flipping into Microsoft’s favor in a big way. That is because rival Google offers its dominant Android mobile operating system without charge. It can afford to do, so since this promotes its cash-cow search business. Meanwhile, Microsoft’s own search engine, Bing, remains one of the company’s weaker products—underlined by Yahoo’s reported desire to get out of a 10-year deal to host its search results. With Android free, why would handset makers ever make a big commitment to Microsoft’s mobile operating system? They might if customers were demanding Windows Phone handsets in huge numbers. But that is unlikely as well, given mobile-software developers are focused on building apps for platforms that already have significant market share—namely Android and Apple’s iPhone. After all, having lots of “compatible” software available cemented Windows-based computers’ dominance of the PC market. Conversely, a lack of it will work against Windows-based smartphones. It is difficult for Microsoft’s Surface tablet to compete with Apple’s iPad without having more significant retail distribution. So Microsoft plans to put “Windows Stores” featuring its products inside hundreds of Best Buy locations. But it remains to be seen if wider distribution can really spark enough consumer interest in the Surface to lift significantly its global market share: just 2% in the first quarter, according to Strategy Analytics. In contrast, the iPad had 48%.

A Portfolio As Simple as One, Two, Three (page R1): It may sound counterintuitive, but for the average individual investor, less is actually more. With well over 8,000 mutual funds and exchange-traded funds at their fingertips, individual investors have never had more investment options from which to choose. But with all of that choice comes the potential for overload, and overwhelmed investors can make bad decisions or give in to impulses to chase returns from previously high-performing funds. That is why some experts are pushing a back-to-basics approach to investing. As drastic as it may sound, they say it’s possible—even at times desirable—to construct a very well-diversified portfolio using just three low-cost mutual funds or ETFs. “In this atmosphere, where it’s so easy to get drawn into complicated and niche areas of the market, this is a good way to be disciplined,” says Abby Woodham, a fund analyst at investment researcher Morningstar Inc. Which three funds to use? A classic trio provides exposure to U.S. stocks, foreign stocks and U.S. bonds. Many “Bogleheads”—a group of investors who favor index investing as inspired by Vanguard Group founder John Bogle—suggest a three-fund portfolio consisting of the U.S.-focused Vanguard Total Stock Market Indexfund, Vanguard Total International Stock Index, and Vanguard Total Bond Market Index . Together, the three mutual funds, which also offer ETF shares, track more than 15,000 global securities. One possible allocation is 40% U.S. stocks, 20% international stocks and 40% bonds. That Vanguard portfolio, rebalanced annually, returned an average of 7.14% a year over the last decade, a little less than the 8.07% return of the Dow Jones U.S. Total Stock Market Index and the 8.62% return of the MSCI All Country World ex USA index, and well above the 4.52% return of the Barclays U.S. Aggregate Bond Index. The approach is “simple to understand, simple to implement and simple to maintain,” says Taylor Larimore, a member of the advisory board for the Bogleheads online forum. “We would agree that this three-fund approach offers most investors a prudent, well-balanced, diversified portfolio at a low cost,” says Vanguard spokesman John Woerth.

Lights, Camera…and Lots of Hot Mutual-Fund Action (page R1): Sure, films can make fantastical creatures come to life and superheroes fly. But can they make mutual funds seem compelling to millennials? Current and former film students from New York University gave it a try in a recent competition sponsored by a local entertainment production company. Mutual-fund companies have a “90-year-old dinosaur” of a product and must find a way to make it appealing to people in their 20s, says Daniel Enskat, partner in the production company Warren Enskat Group and in Enskat & Associates, an asset-management advisory firm in New York. Movies seemed like the natural vehicle to Mr. Enskat and his producer partner, Robert Warren, a longtime investment manager who also teaches at NYU’s Tisch School of the Arts. So, the two created the filmmaking competition for Tisch students. After all, they figured, if anyone were capable of putting some sizzle into sector analysis, it would be a promising young director from the school that also produced such luminaries as Martin Scorsese and Joel Coen. But one of the first obstacles the two producers faced was a lot of blank stares. Says Mr. Warren: “As I went around the school to see if anybody wanted to do films on mutual funds, I asked if anybody invested in one.” Nearly no students did.

A Newlywed Financial Vow (page R6): Newlyweds typically have invested countless hours to have their dream wedding. But they often don’t spend enough time planning financial investments for their future together. Couples who get educated about investing, set goals and understand their risk tolerance can increase their chances not only of being able to afford another honeymoon one day, but also of wanting to spend it with each other.

Short Looks Beautiful for Bonds (page R9): As interest rates spiked in the second quarter, many investors in exchange-traded funds changed horses: from intermediate or long-term bonds to bonds with shorter maturities. That shift may accelerate in coming months as the Federal Reserve follows through on recent statements that indicate plans to start scaling back its massive bond purchases, which have kept fixed-income yields at depressed levels for years. When rates rise, bond prices fall, especially those with longer durations, which in turn hurts investors in funds holding such bonds. However, investors looking for higher yields, less volatility, or both had better understand that, despite numerous ETF options for shorter-term fixed-income products, there are some stark trade-offs. You can take on a little less risk, or you can earn a little higher yield. But you can’t do both.

A Smarter Dividend Strategy (page R11): A recent bout of rising U.S. interest rates has beaten up on dividend-paying stocks, rattling shareholders who had been enjoying regular income and higher prices from these so-called defensive equities. But the end of rock-bottom rates shouldn’t be the death of dividend strategies. Indeed, some market professionals say investors just need to be more selective about the types of dividend stocks they pursue.

Europe’s Woes Offer Opportunities (page R13): With U.S. stocks looking increasingly pricey, some fund managers say Europe is more fertile ground for finding cheap shares. While some investors shy away from regions that are politically and economically volatile, as Europe has been over the past few years, others see this precisely as the reason to explore opportunities there.

Even ‘High Yield’ Bonds Don’t Pay Much (page R14): Junk-bond yields have fallen so low that below-investment-grade bonds are no longer a compelling investment, says Charles Bean, a financial adviser in Westwood, Mass. In recent years, investors hungry for returns piled into junk bonds, bidding up prices and pushing down yields. In April, Mr. Bean sold out of a 13% allocation to junk-bond funds for most clients with a moderate risk appetite. “The risk-reward trade-off isn’t attractive,” he says, even though junk-bond prices slid and rates rose a bit in May and June. At Mr. Bean’s firm, the pullback from high-yield bonds follows a broader shift to stocks from bonds that started earlier this year. Mr. Bean expects interest rates to climb in the coming years. When that happens, bond prices tend to fall as investors dump lower-interest bonds to buy higher-yielding ones. Bond exposure was reduced by 10% for clients who can handle moderate risk. “We could be dealing with flat to negative returns in the bond market in the next three to five years,” says Mr. Bean.


The Wall Street Journal: Thursday, June 20, 2013

Markets Flinch as Fed Eyes Easy-Money End (page A1): Federal Reserve Chairman Ben Bernanke said the central bank could start winding down its $85 billion-a-month bond-buying program later this year and end it altogether by mid-2014, setting up a high-stakes test to see if the economy and financial markets can begin to stand on their own. Financial markets—which have been enlivened by the fuel of the Fed’s easy-money policies—didn’t take the news happily. The Dow Jones Industrial Average finished the day down 206.04, or 1.35%, at 15112.19. Yields on 10-year Treasury notes jumped 0.126 percentage point to 2.308%, the highest level since March 2012. The dollar strengthened. Asian markets moved lower in early trading Thursday. Behind the Fed’s strategy for unwinding its bond-buying program were its optimistic new economic forecasts for next year, including a projection that the jobless rate, which was 7.6% in May, will fall to between 6.5% and 6.8% by the end of 2014.

For Web Firms, Faster Access Comes at a Price (page B1): Facebook, Google and Microsoft and other Internet companies have been paying broadband-service providers for connections to get faster and smoother access into their networks. Netflix has been reluctant.

A Boot at Men’s Wearhouse (page B2): A month ago, Men’s Wearhouse Inc. called co-founder and Chairman George Zimmer the “chief driving force behind the Company.” By Wednesday, the seller of discount suits had driven him out. The public ousting of Mr. Zimmer, who opened the first Men’s Wearhouse with a hand-painted sign and $7,000 in 1973 and who has been the face of the retail chain’s advertising, is a reminder of the often-fractious relationships between companies and their founders. Men’s Wearhouse said early in the day that it had “terminated” Mr. Zimmer as the board’s executive chairman and was discussing what if any relationship he would have with the company in the future. The 64-year-old Mr. Zimmer shot back later saying he had disagreed with the company’s direction and “the board has inappropriately chosen to silence my concerns.” Investors didn’t expect the move, which sent the company’s shares down as much as 6.9% Wednesday before they recovered to close at $37.04, down 1.1%. The company has warned in its securities filings that Mr. Zimmer is important to its success and that a loss of his services could hurt its business and stock price.

Microsoft Backtracks on Xbox Policies (page B2): Microsoft Corp. said Wednesday it will reverse some unpopular policies it recently announced for its coming Xbox One videogame console. The Redmond, Wash., software company said it would no longer require its Xbox to connect to the Internet each day, nor would it restrict how its videogame discs are traded, resold or rented. “We have listened and we have heard loud and clear from your feedback that you want the best of both worlds,” Don Mattrick, head of Microsoft’s entertainment division that houses the Xbox, said in a statement. The changes are a clear misstep for Microsoft, whose currently selling Xbox 360 has reigned as the top videogame console in the U.S. for more than two years, according to NPD Group. Microsoft unveiled its $499 Xbox One in May to much acclaim for its new features and high fidelity images. But shortly after, the company fell under heavy criticism among gamers for its newly restrictive stance on used games and game play. The policies for the Xbox One due out in November included offering technology to videogame publishers to restrict how titles are resold or traded at participating retailers. The result was a large campaign by customers, partly through Twitter, to convince Microsoft to reverse course.

Nike Takes a Page from Apple’s Playbook (page B4): At a trendy loft here where DJs spin songs and assistants wheel in Red Bull energy drinks, Nike Inc. is embarking on an experiment that it says is increasingly crucial to its business: encouraging software developers to build applications for its FuelBand activity-monitoring device. Nike is giving select developers terabytes of data from customers wearing the digital wristband. The company hopes the aggregate data—from the average duration of a run (35 minutes) to how energetic residents of certain cities are (New Yorkers move more than Angelenos)—will lead to apps that make the FuelBand more indispensable to users. “The more uses there are for the FuelBand, the more it becomes something you will never take off,” said Stefan Olander, Nike’s head of digital sport, in an interview. Nike’s data-sharing venture is part of a larger shift at the Beaverton, Ore., sportswear giant to think more like a technology company. Nike, which reported $24 billion in revenue last year, can no longer just make sneakers and clothing, Mr. Olander said, but also must develop a technology business to better connect with customers who are increasingly glued to smartphones and social media. Whether Nike can prosper in technology remains to be seen. Nike has a checkered history with gadgets, dating back to a clunky running monitor it debuted in the 1980s with lackluster results. The company also faces a slew of competitors with FuelBand, which Nike released early last year. Upstarts such as Fitbit Inc. and Jawbone Inc. that make similar fitness-tracking products already share customer data with app makers, and larger companies such as Apple Inc. and Google Inc. are emerging as potential rivals by working on their own wearable technology. Analysts say Nike’s move to encourage developers to build software for the FuelBand is an attempt to mimic Apple’s successful effort to build its App Store. The App Store, which started as a platform to encourage programs for Apple’s mobile devices, has now become a $25 billion industry, setting Apple’s iPhone apart from its competitors and encouraging more customers to buy the device. “The iPhone was successful because people built great apps around it,” said Greg Gottesman, managing director at Madrona Venture Group, a Seattle venture capital firm, and a Nike accelerator mentor. “Nike will be more successful owning a platform, rather than just a product.”

Extreme Sports Get a Camera (page B7): Nick Woodman longed for a way that he and other surfers could photograph their most outrageous stunts. Using rubber bands and a Velcro surfboard leash, he attached hundreds of waterproof cameras to his wrist. But the rough Northern California surf proved too powerful, flooding every model he tested. Mr. Woodman concluded he needed to build his own camera, and he soon began assembling a prototype with hot glue and plastic. He raised $235,000 from his parents to perfect his invention and hired a manufacturing firm in China to produce it in bulk. In 2004, he started selling the cameras under the brand name GoPro at surf shops and trade shows. Six years later, he landed his first big retailer, Best Buy Co. Today, Mr. Woodman’s company, Woodman Labs Inc., pulls in $526 million in annual revenue, and its cameras have become the gold standard for self-documenting extreme sports. The matchbox-sized devices, which range in price from $200 to $400, are mounted on helmets, bike handles, surfboards and snowboards of both weekend warriors and professional athletes, including Olympian Shaun White and sky diver Felix Baumgartner.

Facebook Plays Catch-Up on Video (page B12): When Twitter Inc. acquired the video-sharing app Vine in October, it was largely viewed as a consolation prize after the company missed out on photo-sharing app Instagram, which was snapped up by rival Facebook Inc. earlier last year. But now, Facebook is trying to catch up to Twitter. At an event on Thursday, Facebook is expected to unveil pieces of its own Vine-like video service, under development for months, that would allow users to create and share brief video clips, people familiar with the matter said. The latest contest between Twitter and Facebook shows just how hard it is for even these relatively nimble young companies to stay ahead of the curve. At stake is more than just Facebook’s credibility with tech-savvy trend setters, but rather a growing form of advertising that both rivals want to dominate: The video-ad market is expected to grow 41% to top $4 billion this year, according to eMarketer Inc.

Wednesday’s Markets: Stocks Taper Off From Recent Gains (page C4): Federal Reserve Chairman Ben Bernanke spoke, and investors cringed. Stocks declined and both Treasury-bond yields and the dollar rose sharply, all signs of market unease, after Mr. Bernanke repeated his May comments that the Fed this year could begin trimming the size of its monthly debt purchases. “For some people, it is, ‘Oh my goodness, the Fed is going to put it in reverse,’ ” said Andy Brooks, head of U.S. stock trading at Baltimore asset-management firm T. Rowe Price. He said he thinks the stock market will eventually bounce back, if, as the Fed forecasts, the economy keeps improving, but bonds could take a harder hit. The Dow Jones Industrial Average fell 206.04 points, or 1.3%, to 15112.19, declining sharply after two consecutive days of gains. It remains just 1.9% below its record of 15409.39 hit May 28. The bond market can be more sensitive to Fed policy changes than stocks, and that was the case on Wednesday. The yield of the 10-year Treasury note jumped to 2.308%, a 15-month high, from 2.182% on Tuesday. The dollar, seen benefiting from a Fed pullback, climbed against rival currencies. The heavy swings reflect the expectation that, as the Fed cuts back on its stimulus program, all manner of interest rates will continue their recent moves up from the exceptionally low levels of recent years. Higher rates are bad for stocks, bonds and economic growth. They help the dollar by boosting the return on short-term dollar investments. Mr. Bernanke continued his policy of stating his plans clearly, in hopes markets won’t be surprised when the Fed begins to act.

Credit Markets: Markets for Bonds Sell Off (page C4): Bond prices slumped, sending the yield on the 10-year Treasury note to its highest level in 15 months, as the Federal Reserve upgraded its growth projections for the U.S. economy. Yields on 10-year Treasurys jumped, closing at 2.308%, according to Tradeweb, from a low point on the day of 2.167%. Later in the afternoon, the yield on the 10-year Treasury note reached 2.360%. When bond yields rise, prices fall. Highly rated corporate bonds are more sensitive to sharp interest-rate moves as they are tethered more tightly to Treasury yields. When rates go up, the prices of existing, lower-yielding bonds fall.

No Losers or Winners with These Digital Toys (page D3): If you are the parent of a child under age 6, there’s a good chance you know about Toca Boca, the Swedish app developer with games like Toca Hair Salon, Toca Tea Party and Toca Kitchen, which are helping define the world of digital play. Boca’s newest “digital toy,” launching Thursday, is an app called Toca Builders. It aims to pull in slightly older children by combining elements of a box of plastic Legos with a classic red Etch A Sketch. It will provide another test of how well the company and its team of “playsmiths” can anticipate the desires of the first generation to use an iPad before they could talk. Unlike with Angry Birds and many other popular digital games, kids can’t win or lose when playing one of Toca Boca’s 20 apps. The Toca apps instead provide an immersive play task, and kids interact with each other while doing it. One kid may be at the controls, but the other is interjecting, making suggestions and laughing.


The Wall Street Journal: Friday, June 14, 2013

Patients Put at Risk by Computer Viruses (page A1): The Food and Drug Administration is warning makers of heart monitors, mammogram machines and myriad other medical devices that their gear is at risk of being infected with computer viruses that can endanger patients. “We are aware of hundreds of medical devices that have been infected by malware,” or dangerous computer software, said Bill Maisel, a senior official at the FDA’s device unit. Though the agency doesn’t know of deaths or injuries resulting from this, he said, “it’s not difficult to imagine how these types of events could lead to patient harm.” For the first time, the agency recommended that manufacturers submit security plans to ward off cyberattacks when seeking FDA approval for their products. The agency also advised hospitals to be more vigilant in reporting cybersecurity failures, which can be tough to detect.

Consumers Buck Headwinds, Binge on Big-Ticket Goods (page A2): U.S. consumers demonstrated a renewed willingness to open their wallets for retailers in May, easing worries about a slowing economy heading into the summer. Overall retail sales increased 0.6% last month, putting them 4.3% higher over the past year, the Commerce Department said Thursday. The strong gain after two sluggish months returned consumer spending to a pace that has helped power much of the four-year-old recovery. “U.S. consumers continue to be the gift that keeps on giving,” said Jim Baird, chief investment officer for Plante Moran Financial Advisors. “The resurgence in home values and rising stock prices have boosted consumer spirits and catalyzed spending.” Households’ propensity to keep spending suggests the economy should strengthen later in 2013 after powering through strong headwinds. Consumer spending, which accounts for more than two-thirds of total demand in the U.S., was the overwhelming driver of growth early this year.

Advanced Placement Testin Computer Science Added (page A5): The College Board’s Advanced Placement Program said Thursday that it plans to add a new computer-science program to its class offerings, the first new test in seven years. The move reflects a growing interest in training students for careers in the sciences amid a national push to make the U.S. economy more competitive globally.

‘Always Be a Gentleman’ and Other Fatherly Advice (editorial by Fay Vincent, page A13): My father was definitely old school. He rarely swore, drank only an occasional beer in the high summer heat, and generally lived the solid decent life of what he called “a gentleman.” From him I learned the values of decency, honor and pride. During his lifetime I occasionally felt he was totally behind the times with his regular injunctions that I do my best and honor the family name. Yet now I realize the value of his legacy, which is summed up in the following set of commandments:

Justices Strike Down Gene Patents (page B1): The Supreme Court unanimously ruled that human genes extracted from the body can’t be patented, a victory for doctors and patients who argued that such patents interfere with scientific research.

Best Buy to Carve Out Microsoft Ministores (page B5): Best Buy Co. is opening a new door to selling Microsoft Corp. products, with in-store shops called Windows Stores. The companies said Thursday they are teaming up to transform computing sections in 600 Best Buy-owned locations into mini-stores featuring Microsoft computers, phones and Xbox videogame machines. The new Windows Stores, which will start opening this summer, will be visually distinct from the rest of a Best Buy, with wood floors and prominent Microsoft colors and logos.

Twitter Tests Tools to Track Tweets (page B5): Twitter Inc. is moving to give users more ways to see how popular their tweets are, and information on what types of people “follow” them. Twitter said Thursday it is testing—with a small number of users—a simplified version of the analytics functions it offers to companies that purchase ads on Twitter. The data includes information on how many followers a Twitter user added in recent weeks, some of the tweets that generated the most replies or retweets from other Twitter users and information such as the most popular geographic location of a user’s followers.

Thursday’s Markets: U.S. Stocks Tune Out Tokyo (page C1): Stocks rallied as upbeat readings on the U.S. economy helped insulate against another steep drop in Japan. Thursday’s rally not only broke the first three-day string of declines for the Dow this year, but also marked a shift from recent weeks where strong economic news was seen as a negative for stocks because it could prompt the Federal Reserve to scale back on its efforts to ease monetary policy. The Dow Jones Industrial Average gained 180.85 points, or 1.2%, to end at 15176.08. The blue chips notched their first advance of this week and more than wiped away a 127-point drop on Wednesday. The Standard & Poor’s 500-stock index tacked on 23.84 points, or 1.5%, to 1636.36. All 10 of the S&P 500’s sectors gained ground, led by growth-sensitive consumer-discretionary, materials and energy sectors. The Nasdaq Composite Index advanced 44.93 points, or 1.3%, to 3445.36.

Rising Bond Yields Rekindle Euro Fears (page C1): The recent turbulence rattling global bond markets is unmasking an unpleasant notion in Europe: The euro zone’s problems aren’t solved. Government bonds have recently taken a hit around the world, now that investors are preparing for the possible end of central banks’ boundless economic stimulus. And those bonds of the weakest euro-zone countries have shown some of the biggest drops. Bond yields rise when their prices fall.

Mickelson Sets the Pace (page D8): Reports of the demise of both Merion Golf Club and Phil Mickelson proved absurdly premature in the opening round of the U.S. Open. When the day began, thunderstorms were expected to render the course unplayable, or create the kind of spongy greens that might allow the world’s best golfers to obliterate par on the 6,996-yard set up. Instead, as twilight fell on a day that included a 3½ hour rain delay that likely pushed the first round into Friday, Phil Mickelson was setting the pace with a three-under 67. Belgian Nick Colasaerts was the only other golfer to finish his round in the red.

Larry Ellison’s Fantasy Island (page M1): One of the world’s richest people, Larry Ellison is known for his colorful exploits. Now he’s tackling one of his most ambitious and expensive projects yet: rejuvenating one of Hawaii’s smallest inhabited islands. In June 2012, Mr. Ellison, the co-founder and chief executive of technology giant Oracle, bought Lanai for $300 million from American businessman David Murdock. Now he owns nearly everything on the island, including many of the candy-colored plantation-style homes and apartments, one of the two grocery stores, the two Four Seasons hotels and golf courses, the community center and pool, water company, movie theater, half the roads and some 88,000 acres of land. (2% of the island is owned by the government or by longtime Lanai families.)


The Wall Street Journal: Wednesday, June 12, 2013

Global Tumult Grips Markets (page A1): The tectonic plates of the world economy are shifting, moving the yield on the 10-year Treasury to the highest level in more than a year and shaking financial markets from Tokyo to Mumbai and Johannesburg to São Paulo. For the past few years, the global economy, struggling to recover from a financial crisis, has relied on a few constants: The U.S. would print plenty of money and keep interest rates very low. China would provide a lot of demand and vacuum up commodities from around the world. And Japan was largely irrelevant. Suddenly, all three of those are being questioned in markets, triggering paroxysms in stocks, bonds, commodities and—particularly, in the past couple days—the currencies of emerging markets. The big questions hanging over markets and the global economy now: Is this is the inevitably bumpy beginning of a welcome return to normal—a world in which the U.S. economy doesn’t need big and repeated doses of monetary stimulus, Japan grows again and China’s economy gently slows to a sustainable speed? Or is it a harbinger of more volatility in financial markets—perhaps the result of a misreading of the Federal Reserve’s policy intentions by the markets or a premature move by the Fed to cut back on easy money—that yields an unwelcome increase in market interest rates before the U.S. economy achieves what Fed Chairman Ben Bernanke once called “escape velocity”?

Cities Hunt for Startup Magic (page A3): In recent years cities and states across the country have established venture funds, tax incentives and other programs meant to encourage new businesses. Such efforts have been especially popular in cities such as Pittsburgh, Detroit and Cleveland that have seen their industrial economies decline in recent decades. The focus on entrepreneurship comes at a time when job growth has been slow and rates of business formation are falling nationally. Economic research suggests a possible connection between the two trends: Harvard economist Edward Glaeser, among others, has found that cities with high rates of entrepreneurship experience faster job growth.

Pomp and (Gaudy) Circumstance (page A15): For many years, college and university graduation ceremonies have become downright grating. It’s not the bromidic speeches that are at fault, or the predictable and politically correct honorary degree recipients, or indeed any of the more rarefied aspects of the proceedings. It’s the robes. They’ve gotten just plain hideous. The basic cap and gown, once so simple and clearly defined, now come in such a riot of colors and variations that the average commencement has morphed into a sartorial LSD trip.

CIA Chooses: Amazon or IBM? (page B1): The battle between IBM and Amazon over a $600 million contract to set up a cloud-computing system for the Central Intelligence Agency shows the growing importance of intelligence-agency business for tech companies.

Facebook Shareholders Give Grilling to Zuckerberg (page B1): Facebook Inc. Chief Executive Mark Zuckerberg faced his shareholders for the first time on Tuesday—and many of them weren’t happy. With the company’s stock nearly 40% below the price of last year’s initial public offering, Mr. Zuckerberg took a half-hour of angry questions from investors at the company’s first annual shareholders meeting. The grilling illustrates how far Mr. Zuckerberg has to go to persuade Wall Street that he has the drive and ability to build the kind of business investors had hoped for.

A Reality TV Show, Without TV (page B1): A reality “show” called “Summer Break” will exist exclusively on social-media sites like Twitter and Tumblr, and is intended to be viewed on the mobile devices that dominate the lives of its target audience.

Nintendo Resists the Lure of Mobile Games (page B6): Game apps for smartphones and tablet computers are selling at a rapid pace, much faster than the market for console games. But Satoru Iwata isn’t succumbing to their allure. The president of Nintendo Co. is determined to stick to its three-decades-old strategy of making games only for its own hardware, despite pressures to exploit its popular software more widely. In an interview, Mr. Iwata said the short-term benefits of going after the mobile-apps market wouldn’t be worth the potential harm to the company’s strategy of combining hardware and software in ways that make Nintendo’s offerings unique.

Microsoft Angers Gamers (page B6): Microsoft Corp. has touched a nerve with gamers, and rival Sony Corp. hopes to exploit the situation. The Redmond, Wash., software giant last week irked the gaming community by disclosing restrictions associated with how game discs for its forthcoming Xbox One console will be resold, lent or shared with friends. Microsoft also said the Xbox One, which is being released in November, would be required to connect to the Internet at least once per day. Microsoft’s restrictions—as well as the announcement Monday of a $499 price tag, which is much higher than the company’s previous console launches—prompted angry comments from gaming fans.

Google Buys Startup Waze to Bolster Its Maps, Block Purchase by Rivals (page B6): Google Inc. on Tuesday confirmed it had purchased Waze, an Israeli mapping and navigation startup, in a bid to bolster its Google Maps service with Waze’s real-time traffic updates and keep the company out of the hands of rivals. The Internet-search giant didn’t disclose the purchase price, but a person familiar with the deal said it paid just over $1 billion for Waze, making it the fourth-largest deal in Google’s 15-year history.

Apple’s Rising Star: Craig Federighi (page B7): A new frontman for Apple Inc. is emerging. At the company’s annual developers conference Monday, little-known executive Craig Federighi got the most airtime during the keynote—and strong reviews. With the spotlight came an important task for the senior vice president of software engineering: maintaining the loyalty of developers and impressing technology insiders with Apple’s latest software and designs. The lanky, 44-year-old engineer has a long Apple pedigree. He worked at Next, the other computer company founded by Apple co-founder Steve Jobs, and joined Apple when it acquired the company in 1997.

Employed, but Not Engaged on the Job (page B7): Does your job excite you? For most American workers, the answer is a resounding “no.” A new Gallup poll finds that 52% of all full-time workers in America aren’t involved in, enthusiastic about or committed to their work. Another 18% are “actively disengaged,” meaning they have gone beyond just checking out mentally, and could even be undermining colleagues’ accomplishments. That leaves just 30% of American workers who feel excited about their jobs. While disheartening for managers, that finding marks an improvement over worker-engagement levels measured in the depths of the financial crisis and actually matches the highest engagement rate since Gallup started tracking in 2000.

The Case of the Invisible Web Ads (page B8): The old adage in advertising—that half the money is wasted but no one knows which half—turns out to be as true for the digital world as it ever was for traditional media. An astounding 54% of online display ads shown in “thousands” of campaigns measured by comScoreInc. between May of 2012 and February of this year weren’t seen by anyone, according to a study completed last month. Don’t confuse “weren’t seen” with “ignored.” These ads simply weren’t seen, the result of technical glitches, user habits and fraud. The finding implies that billions of marketing dollars are being poured down a digital drain. Last year, $14 billion was spent on online display advertising, estimates eMarketer, 40% of all online ad spending.

Rising Star Emerges at Berkshire (page C1): When Tracy Britt arrived in Omaha, Neb., in 2009 to meet with Warren Buffett, she brought a Harvard M.B.A., a glittering resume and a boatload of ambition. But she also brought the famed investor a gift to highlight their shared Midwestern roots: a bushel of corn and a batch of tomatoes. The seed Ms. Britt planted that day yielded quick results: a job for Ms. Britt as Mr. Buffett’s financial assistant at Berkshire Hathaway Inc. Almost four years later, it has blossomed further, with Ms. Britt emerging as one of Mr. Buffett’s top lieutenants and even serving as chairman of four companies within his $284 billion conglomerate. Ms. Britt, now 28 years old and more than five decades younger than her boss, occupies a role unlike any other within Berkshire. With an office next to Mr. Buffett’s at Berkshire’s headquarters, Ms. Britt helps with financial research, accompanies Mr. Buffett to meetings and occasionally drives him around town. The billionaire gradually tacked on additional responsibilities.

Tuesday’s Markets: Central Banks Confound Investors (page C4): U.S. stocks ended a see-saw session with broad declines Tuesday as investor concerns over the limits of global central-bank policy triggered a sharp rise in the Japanese yen and a powerful reversal in the Treasurys market. Global financial markets had been roiled overnight and early Tuesday as investors fretted over the U.S. Federal Reserve’s and the Bank of Japan’s commitment to stimulating their economies through bond purchases—fears that were underscored Tuesday after the BOJ refrained from introducing new measures to ease market volatility, citing signs of economic recovery. The Dow Jones Industrial Average, which started the New York trading session with a drop of about 153 points, erased those losses by lunchtime before weakening again. The Dow industrials finished with a loss of 116.57 points, or 0.76%, to 15122.02, its fourth triple-digit decline in two weeks. The Standard & Poor’s 500-stock index declined 16.68 points, or 1.02%, to 1626.13, while the Nasdaq Composite gave up 36.82 points, or 1.06%, to 3436.95.

Overheard: Could Foursquare Be a Takeover Candidate? (page C16): With firms willing to pay so much for data, could Foursquare find a lifeline? Foursquare also has a small, but dedicated, community of around 10 million active users, says a person familiar with its numbers. It captures information on points of interest like restaurants when users “check in.” And other firms have found the data useful. For instance, Foursquare can determine more accurate opening and closing times for local businesses. Foursquare has lost momentum after raising capital in 2011 that implied a $600 million valuation. Yet considering local data’s strategic value, Foursquare could end up being a target itself before long.

Why Tiger Hates the Northeast (page D6): In 24 tournament starts in New York, New Jersey, Pennsylvania and Massachusetts, Tiger Woods has won just twice, or 8% of the time he tees it up. That would be terrific for any other golfer on the planet, but for Woods it’s downright awful. Bear in mind that over his full career, Woods has won roughly 25% of his starts: That includes a scary 37% of his starts in the Midwest, nearly 30% in Florida and 26% on the West Coast. His apparent allergy to the Northeast isn’t just surprising, it defies the law of averages. This week, as Woods prepares for the U.S. Open at Merion Golf Club outside Philadelphia, you have to wonder if he’s secretly dreading it. As a sometimes-wild bomber, he has always thrived on longer, more forgiving layouts whose greens he has essentially memorized after hundreds and hundreds of rounds. But the classic courses in the Northeast, many of which date to the beginning of the 20th century, aren’t forgiving, really: they’re more like 7,000-yard brain teasers. Misses can be brutally penal and the subtle rolling greens can remain mysterious even to pros who have played them for decades.

The Count: At the U.S. Open, Watch Out for the Iron Men (page B6): The U.S. Open is going small this week. The diminutive dimensions at Merion Golf Club will put a premium on accuracy. Since Merion measures less than 7,000 yards, the perception is that the compact course will favor short hitters. But that isn’t necessarily the case. Precise long-iron play for shots between 200-250 yards will be the key to victory, giving some of the more powerful players in the field an edge.

The 10 Most Valuable Brands in the World

In spite of struggling stock prices and loud public uncertainty over Tim Cook’s innovative capabilities, Apple is once again the most valuable brand in the world, for the year 2013.
Every year, BrandZ and Millward Brown Optimor calculate and rank brands based on their global value. And even though Apple’s growth rate decreased by 95%, the tech giant’s brand value still increased by 1% from 2012 to a a whopping $185 billion.
Millward Brown VP Oscar Yuan told Business Insider that this is because the company ranks brands based not only on publicly available financial information, but “the second half, which is the unique part, is that we take in the consumer sentiment.” Millward Brown polls more than 200 million consumers from 43 countries annually. In spite of everything, “Apple, in the eyes of consumers, is the gold standard.” The brands that really won this year were those tied to emerging mobile capabilities — be it AT&T for servicing tablets and smartphones or Visa for dominating online payment methods.

Click here for the complete list of the top brands.