2015 01 06 cmyk na 04 - the wall street...

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* * * * * TUESDAY, JANUARY 6, 2015 ~ VOL. CCLXV NO. 4 WSJ.com HHHH $3 .00

DJIA 17501.65 g 331.34 1.9% NASDAQ 4652.57 g 1.6% NIKKEI 17408.71 g 0.2% STOXX600 333.99 g 2.2% 10-YR. TREAS. À 24/32 , yield 2.038% OIL $50.04 g $2.65 GOLD $1,203.90 À $17.90 EURO $1.1933 YEN 119.64

CONTENTSArts in Review.......... D5CFO Journal................. B5Corporate News B2,3,7Global Finance............ C3Health & Wellness D1-4Heard on the Street C8

In the Markets........... C4Markets Dashboard C6Opinion..................... A9-11Sports.............................. D6U.S. News................. A2-4Weather Watch........ B7World News...... A5-7,12

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What’sNews

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World-WidenThe new lawmakerswhotake their seats in Congress to-day tend to be younger andhave less legislative experiencethan their predecessors. A1n Boko Haram seized a Nige-rian army outpost in a week-end attack that underscoreshow fast the military is losingground to the insurgency. A12n Indonesia imposed stifferrules on airlines in the wakeof the AirAsia crash and sus-pended aviation officials. A5nThe U.S. charged two Amer-icans with attempting to over-throw Gambia’s government ina failed coup last week. A12nAn intensifying flu seasonhas led to the deaths of at least21 children and has promptedschools to take precautions. A3nThe Justice Departmentjoined two lawsuits against oneof the highest-billing doctors intheMedicare program. A3n Pakistan’s Parliament be-gan debate on the establish-ment of military courts totry terrorism suspects. A6n Jury selection began in thetrial of accused BostonMara-thon bomber Tsarnaev. A3n Jerry Brownwas sworn infor an unprecedented fourthterm as California governor. A4nALibyan plane bombed aGreek-run tanker in an apparenterror, killing two crewmen. A12nClashes in Bangladesh onthe anniversary of last year’svote left at least four dead. A12

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Global stock markets sankas oil briefly fell below $50

and concerns about Europe’seconomy grew. The euro hit anine-year low, due in part tonervousness over Greece.A1, C4The Dow slid 331.34 points,or 1.9%, to 17501.65, its largestdrop since Oct. 9. Energy sharesregistered steep declines. C1nMorgan Stanley fired astaffer for allegedly stealingaccount data on about 350,000clients and posting some of theinformation for sale online. C1nAutomakers reported theirstrongest annual U.S. salessince 2006, helped by low fuelprices and interest rates. B3n China dropped a quota onexports of strategically im-portant minerals that sparkeda global trade dispute. A6n Apartment rents jumpedan average of 3.6% nation-wide last year amid strongdemand and short supply. A2nDish unveiled a new onlinevideo service that includesESPN, part of an effort toreach younger viewers. B1n The St. Louis Rams’ ownerannounced a stadium planthat may move Los Angelescloser to rejoining the NFL. A3nCNBC is switching to Cogentto track its daytime TV ratingsafter complaining that Nielsenunderreports its audience. B1nU.S.-stock funds rose 7.6% onaverage in 2014 after a strongfourth quarter. Foreign-stockfunds fell 5% for the year. R2

Business&Finance

Stock markets around theglobe tumbled as oil briefly fellbelow $50 a barrel and freshworries arose about Europe’seconomy, stoking fears ofdeflation.

The euro dropped to its low-est level against the dollar since2006, reflecting concerns Greececould be headed for a messy exitfrom the common currency. Add-ing to pressure on the euro wasa round of tepid inflation read-ings. That data raised expecta-tions the European Central Bankwill soon beef up its stimulusprogram, which investors inter-preted as bearish for the euro.

Major stock indexes fell 3% inFrance and Germany and 2% inBritain. U.S. stocks slumped, withthe Dow Jones Industrial Aver-age sliding 331.34 points, or 1.9%,to 17501.65, its largest point andpercentage drop since Oct. 9. Theretreat was led by steep declinesin energy shares and a lesserpullback in large banks.

Investors snapped up safer as-sets such as gold, which rose1.5%, and government bonds. Theyield on the 10-year U.S. Trea-sury note slid to 2.038%, its low-est since May 2013. Yields fallwhen prices rise.

Turmoil continued early Tues-day in Asia, with Japan leadinglosses. The Nikkei Stock Averagefell 2.5% before midday.

Roiling markets internation-PleaseturntopageA7

By Brian Blackstonein Frankfurt,

Tommy Stubbingtonin London and

Min Zeng in New York

Stocks Slide on Oil, Economic FearsGlobal MarketsFall as Crude DipsBelow $50, DataHint at Deflation

LONDON—Charterhouse Capital Partners LLP isthe elder statesman of British private equity, 80years old and among London’s most prestigious andprivate firms. From an office in a square by theLondon Stock Exchange and St. Paul’s Cathedral, ithas long thrown off profits to a tight circle of prin-cipals.

But behind the genteel facade, Charterhouse hasbeen a scene of friction, involving both how itsearnings are divided among the staff and how tohand power to a new generation. At a sensitivetime—as the firm asks investors for billions for newdeals—it is grappling with two soured investments,and details of its internal discord have been laidbare in a lawsuit by a disgruntled former partner.

The lawsuit also revealed a fateful choice madeby executives who became Charterhouse’s ownersnearly 14 years ago: They would make as muchmoney as possible, and pay little heed to their suc-cessors.

“The absolute intention is to maximise the valueof [Charterhouse] to the people who are there to-

day,” Gordon Bonnyman, then chief executive andnow chairman, wrote in a 2001 letter made publicin the lawsuit.

“In other words, no one is particularly concernedwith the financial well being of those who will suc-ceed us.”

Charterhouse partners never aimed for the firmitself to become valuable, according to testimony inthe suit, filed in London’s High Court. The approachcontrasts with that of big American buyout firms,which don’t just profit from their deals and fees butalso build the value of their brands, making it possi-ble to raise large sums by someday selling shares tothe public.

Blackstone Group LP, KKR & Co., Carlyle GroupLP and Apollo Global Management LLC have be-come public companies with multibillion-dollarmarket values, and are global leaders in private eq-uity. Charterhouse and most of the rest of Britain’sbuyout firms remain private and have less marketimpact.

Geoffrey Arbuthnott, the petitioner in the suitand for years the second-largest shareholder after

PleaseturntopageA8

BY SIMON CLARK AND BECKY PRITCHARD

BEHIND THE FACADE

Battle Over Profit, FutureShakes British Buyout Firm

4

–2

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Spain–1.1% inDecember

Germany+0.1% inDecember

Eurozone+0.3% inNovember

$110

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F M A M J J A S O N D J

10

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Dec. Jan.

DAX

CAC 40

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European marketsHow many dollarsone euro buys

$1.40

1.15

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1.35

’152014

S&P 500energysector

Dowindustrials

U.S. shares and energy stocks4

–8

–6

–4

–2

0

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%

Dec. Jan.

Falling Europeaninflation rattledmarkets Monday,while oil pricestumbled.

Sources: Eurostat; Federal Statistics Office (Germany's December figure); INE (Spain's December figure); WSJ Market Data Group (oil); Tullett Prebon (Euro);FactSet (European markets; S&P 500 energy sector); SIX Financial Information (Dow)

The euro slumpedto a nine-year lowagainst the dollar,and stocks slidaround the globe.

Consumer price indexes Nymex crude-oil futuresMonday $50.04

The Wall Street Journal

BALTIMORE—Side-by-side on folding chairs, Rickand Sonia Samuel pursedtheir lips and blew. With hisface turning red, Mr. Samuelmanaged to produce a low-fre-quency buzzing. His wife’smouth emitted noises several oc-taves higher.

“Sometimes people think thatif they just blow, they’re goingto produce music,” their instruc-tor, Victoria Vox, explained tothe group of about 20 people,gathered in a turn-of-the-cen-tury townhouse.

The Samuels, both in their40s, were here to learn basic

“mouth trumpet”—a vocal tech-nique using the lips to imitatethe sound of a trumpet, butwithout a trumpet. “It takespractice to get the tone andpitch,” said Ms. Vox, a profes-sional singer-songwriter who ledthe group in a mouth-trumpetversion of the Beatles’ “All YouNeed Is Love.” “You have to sing,and you have to know what noteto hit, too.”

Ms. Vox, who also plays uku-

lele and piano, is among agroup of performers who areleading an unlikely revival ofthe mouth trumpet—alsoknown as “vocal” or “lip”trumpet—even as they seekrespect as serious musicians.The 36-year-old, whose given

name was Victoria Davitt, hasheld similar workshops acrossthe country while touring to pro-mote her eighth album, “Key,”which was nominated in Marchfor an Independent MusicAward. She wrote or co-wrote allof the songs in the album, manyof which feature a real trumpetthat Ms. Vox mimics onstage.

“It is singing and it is myPleaseturntopageA8

Toot Your Own Horn, but Without the Horni i i

Mouth Trumpet Jazzes Up the Music Scene; ‘It’s Not Just a Joke’

Europe has returned to thesignature brinkmanship of thedebt crisis that brought its cur-rency union close to collapse

five years ago:France and Ger-many are again

warning Greece it is putting itseurozone membership at risk.

With a Greek election loom-ing this month, and a partyhostile to European-imposedausterity apparently poised towin, French President François

Hollande on Monday raised thepossibility of Greece exiting the19-member bloc—departingfrom the traditional stance thateuro membership is irrevocable.

Sigmar Gabriel, Germany’seconomics minister and vicechancellor, warned that Berlin

wouldn’t be blackmailed intooffering concessions onGreece’s debt or the terms ofthe international plan that res-cued the country’s finances.

The tough rhetoric reflectshow the eurozone could beabout to fall back into an exis-tential crisis similar to thatseen in 2010, when the Euro-pean Union had to bail outGreece, and later other coun-tries too.

That period was character-

ized by high volatility in finan-cial markets and open bicker-ing over how and whether torescue struggling countries. Ataste of both has returned inrecent days.

The replay also catches theeurozone in a precarious eco-nomic and political state, afteryears of little or no growth and

PleaseturntopageA7

ByWilliam Horobin inParis and Andrea

Thomas and BertrandBenoit in Berlin

Brinkmanship Returns to the Eurozone

OPINION A9

The Dream PalaceOf the Arab

Bret Stephens on the fiascoesof Palestinian President

Mahmoud Abbas

PERSONAL JOURNAL D1

A Boy? PrenatalTests Beyond Gender

Carrier screeningstest for more than

100 diseases

Inside

Getty

Images

(left);Z

umaPress

WASHINGTON—The new law-makers taking their seats inWashington on Tuesday repre-sent not just a changing of theguard in Congress but a changein the pedigree of its members.They have spent less timemarching through the traditionalsteps toward elected office, in-stead forging political identitiestheir own way.

They tend to be younger andhave less legislative experience.The Senate’s 13 new memberswill join 33 others who haveserved less than one six-yearterm, the highest total since1981. In the House, roughly halfof all lawmakers will have beenin office only since the 2008election, meaning that theirmain political experience is thepolitics of polarization.

“The era of the résumé candi-date is pretty much over,” saidPaul Light, a public-policy pro-

fessor at New York Universitywho spent time as a congressio-nal scholar. “The voter isn’t say-ing my goodness—this candidatedidn’t go to law school,” he said,adding that “something bigger isgoing on underneath the surface,and we’ll wake up 10 years fromnow and say, wow, a lot of thingshave really changed.”

The 2014 midterm was thethird anti-incumbent election inthe past four cycles. Experts saythat means that congressionalleaders in both chambers will bemanaging members who areseen—and see themselves—asoutsiders in an institution thatworks on tradition and seniority.

Consider Republican BenSasse, who will be sworn inTuesday as senator from Ne-braska. He has multiple IvyLeague degrees and work experi-

PleaseturntopageA4

BY SIOBHAN HUGHES

Crop of Young OutsidersRemakes Face of Congress

BY ANGUS LOTEN

Blue chips tumble.......................... C1 Oil dips below $50....................... C4 Euro hits nine-year low............. C4

Heard on the Street: Bewarecomplacency on Greek exit..... C8

Gerald F. Seib: Risks, rewards forBoehner in rebellion on right... A4

Journal ReportBrains, bots or both? Findingthe right financial adviser.Investing in Funds, R1-12

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