P2JW295000-6-A00100-1--------XA CMYK Composite CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO TODAY IN PERSONAL JOURNAL The Thrilla in Vanilla Tech Reviews: The iMac and iPad WEDNESDAY, OCTOBER 22, 2014 ~ VOL. CCLXIV NO. 96 ****** DJIA 16614.81 À 215.14 1.3% NASDAQ 4419.48 À 2.4% Getty Images PLUS NIKKEI 14804.28 g 2.0% STOXX 600 323.74 À 2.1% 10-YR. TREAS. g 7/32 , yield 2.206% OIL $82.81 À $0.10 GOLD $1,251.00 À $7.00 i i Business & Finance T he Dow climbed 215.14 points to 16614.81, roaring back into positive territory for the year, as Apple’s results sparked a tech rally. C1  European stocks surged on the possibility of new ECB stimulus measures. C8 n McDonald’s outlined plans for what it called fundamental business changes after posting a 30% drop in net. B1 n Apple’s iCloud storage service for its users in mainland China was hacked. B3 n The New York Fed failed to examine J.P. Morgan’s investment unit ahead of the “London whale” debacle, a report said. C2 n Coke reported a 14% decline in earnings and cut its revenue and profit targets. B1 i i World-Wide n Homeland Security will begin limiting flights with passengers from three West African countries affected by Ebola to arrival at five U.S. airports. A7 n The Spanish nursing aide infected with Ebola was declared cured. An Ebola patient being treated in Nebraska is set to be released Wednesday. A7 n Fear over Ebola could have a damaging impact across the U.S. if it escalates, experts say. A6 n Hong Kong student leaders and government officials met for the first time since protests began but failed to resolve their standoff. A8 n North Korea freed an American man who was arrested while traveling with a tour group last spring. A11 n South African runner Oscar Pistorius was sentenced to five years in prison for killing his girlfriend. A10 n The Canadian man who ran over two soldiers had been probed for links to an Islamic State-affiliated group. A10 n Russia blamed airport management and an allegedly drunken snowplow driver for the crash that killed Total’s CEO. B4 U.S., Syrian Kurds Cooperated Secretly as City Became Symbol in Islamist Battle In public, the Obama administration argued for weeks that Kobani wasn’t strategically vital to the air campaign against Islamic State extremists. Behind the scenes, however, top officials concluded the Syrian city had become too symbolically important to lose and they raced to save it. As the U.S. role rapidly evolved, U.S. and Syrian Kurdish commanders began to coordinate air and ground operations far more closely than previously disclosed. A Syrian Kurdish general in a joint operations center in northern Iraq delivered daily bat- By Adam Entous, Joe Parkinson and Julian E. Barnes tlefield intelligence reports to U.S. military planners, and helped spot targets for airstrikes on Islamic State positions. In contrast to the lengthy legal debate over U.S. aid to rebels fighting the Syrian regime, U.S. airdrops of weapons to Kobani got a swift nod from administration lawyers—a sign of its importance to the administration. The change in thinking over n Moscow said it will ban imports of all fruits and vegetables from Ukraine. A10 n Died: Nelson Bunker Hunt, 88, Texas oilman … Ben Bradlee, 93, ex-Washington Post editor. Managing...................... B7 Opinion.................. A13-15 Property Report C10-12 Sports.............................. D6 U.S. News................. A2-7 Weather Watch........ B8 World News.......... A8-11 > BY MATTHEW KARNITSCHNIG AND ROBIN VAN DAALEN global companies to avoid paying what regulators consider their fair share of taxes elsewhere. Known in financial circles as “Monsieur Ruling,” Mr. Kohl, who retired last year, had sole authority at Sociétés 6 to approve or reject the tax deals. Foreign companies flocked to the tiny country during his tenure because of the speed and ease of the approval process, local tax advisers say. “I could say ‘yes’ or ‘no,’ ” Mr. Kohl, a bearded 61-year-old with a ponytail, said in a recent interview, which he described as his first. “Sometimes it’s easier if you only have to ask one person.” The European Union’s executive arm said this month it is investigating whether Luxembourg’s tax deal with Amazon.com Inc. violated rules against state subsidies to an individual company. Please turn to page A12 LUXEMBOURG—On the first floor of a rust-colored building near the main railway station, Marius Kohl spent years engineering this country’s most valuable export: tax relief. As head of a federal agency called Sociétés 6, Mr. Kohl approved thousands of tax arrangements for multinational corporations, sometimes helping them save billions. Sociétés 6’s official function is to determine how much tax is owed each year by roughly 50,000 Luxembourg-registered holding companies, most of which have foreign parents. International regulators say the authority has acted more as a facilitator, endorsing confidential tax arrangements that bring business to Luxembourg while allowing Crosswinds Blow on Economy Some factors that could impact growth POTENTIAL GDP BOOSTS Lower rates 0.2 Households and businesses beneﬁt from cheaper borrowing. 0.1 Lower oil prices Consumers pay less for energy, boosting consumption. 0 –0.1 POTENTIAL GDP DRAGS –0.2 Foreign demand slowdown –0.3 Line shows combined –0.4 effect of these ﬁve factors –0.5 –0.6 Multinational ﬁrms face softer sales abroad. Stronger dollar Exporters could be at a disadvantage selling goods. Weaker equity/credit Market volatility slows business investment and hiring. Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ’14 ’15 ’16 Source: Goldman Sachs Global Investment Research The Wall Street Journal PUSH AND PULL: Slowing growth in China and weakness across Europe are buffeting the U.S. economy, while low interest rates and cheaper energy prices are helping prop up the tepid recovery. A2 Composite s Copyright 2014 Dow Jones & Company. All Rights Reserved mission creep. “This is a war of flags. And Kobani was the next place Islamic State wanted to plant its flag,” a senior U.S. official said. “Kobani became strategic.” The U.S. now is relying on two separate, stateless Kurdish groups in Iraq and Syria as ground forces to back up its air campaign against the extremists. This has strained U.S. relations with another strategically important ally, Turkey. The U.S. has conferred newfound legitimacy on the Syrian Kurdish militia Please turn to page A10 Business-Friendly Bureaucrat Helped Build Tax Haven GDP DRAGS n Harvard Law alumni earn more than those of any other U.S. grad school, data show. A4 the fate of one city, described by U.S., Kurdish, Turkish and Syrian opposition officials, shows how dramatically U.S. war aims are shifting. After Islamic State made Kobani a test of its ability to defy U.S. air power, Washington intervened more forcefully than it had initially intended to try to stem the group’s momentum. In doing so, the U.S. crossed a Rubicon that could herald a more hands-on role in other towns and cities under siege by Islamic State at a time when some U.S. lawmakers question the direction of American strategy and warn of ’MONSIEUR RULING’ 0.3 percentage points n Afghan troops are dying at the highest rate in over a decade, new data show. A10 CONTENTS Careers............................ B6 Corporate News... B2-4 Global Finance............ C3 Heard on the Street C16 Home & Digital...... D2,3 Leisure & Arts............ D5 Goals Shift in Militant Fight GDP BOOSTS i Kurds at a cemetery Tuesday mourn three fighters who died in clashes with Islamic State in Suruc, Turkey, near the Syrian border. With companies set to face fines next year for not complying with the new mandate to offer health insurance, some are pursuing strategies like enrolling employees in Medicaid to avoid penalties and hold down costs. The health law’s penalties, which can amount to about $2,000 per employee, were supposed to start this year, but the Obama administration delayed them until 2015, when they take effect for firms that employ at least 100 people. Now, as employers race to find ways to cover their full-time workers while holding a lid on costs, insurance brokers and benefits administrators are pitching a variety of options, sometimes exploiting wrinkles in the law. The Medicaid option is drawing particular interest from companies with low-wage workers, brokers say. If an employee qualifies for Medicaid, which is jointly funded by the federal government and the states, the employer pays no penalty for that coverage. “You’re taking advantage of the law as written,” said Adam Okun, a senior vice president at New York insurance broker Frenkel Benefits LLC. Locals 8 Restaurant Group LLC, with about 1,000 workers, already offers health coverage, and next year plans to dial back some employees’ premium contributions. That is because an employer can owe penalties if its coverage doesn’t meet the law’s standard for affordability. But the company, which is based in Hartford, Conn., hopes Please turn to page A2 Ni Hao, Pard! Bull Riding Comes to China i i i Sport Proves Hard To Translate; Mongolian Cowboy BY BOB DAVIS LAIYANG, China—Professional bull riding’s Great Chinese Hope carefully lowered himself onto 1,000 pounds of ornery bucking bull. Focus, he said he tells himself. No distractions. After the bull settled a bit, the rider shouted that he was ready to go. The chute opened, the bull grazed the side of the gate, bucked once and deposited the rider—splat!—on the ground. Elapsed time: about two seconds. Embarrassed, the rider, whose name is Harihen, brushed himself Please turn to page A12 Washington Post/Getty Images n Yahoo CEO Mayer, aided by a strong third-quarter financial report, defended the firm’s turnaround strategy. B3 Bulent Kilic/Agence France-Presse/Getty Images n Total’s board will meet Wednesday to pick a new chief executive following de Margerie’s death in a plane crash. B1 The GOP hired ex-Facebook engineer Andy Barkett to help target voters. Big-Data Overhaul Jolts Old Party Ways BY PATRICK O’CONNOR WASHINGTON—When the Republican National Committee decided to overhaul its technology for targeting voters last year, it hired a Facebook engineer to shake things up. It might have been a little too successful. Andy Barkett laid into the party’s old ways, taking aim at the ecosystem of consultants who make millions running campaigns but aren’t always eager to share data they gather. He vowed to build software tools to compete with those they sold. For the approaching midterm elections, the RNC had hoped for a single national hub to collect data for races across the nation. Instead, it has had to enter into an uneasy alliance with various groups chasing goals similar to P2JW295000-6-A00100-1--------XA n Federal regulators moved to ease mortgage-lending standards, agreeing to drop a 20% down-payment rule. C1 n Ocwen was accused of backdating letters to borrowers to prevent them from correcting problem home loans. C1 YEN 107.00 BY ANNA WILDE MATHEWS AND JULIE JARGON n Hedge fund Third Point has taken a stake in Amgen and wants to explore splitting the biotech company. B1 n Some firms are pursuing such strategies as enrolling employees in Medicaid in a bid to avoid health-law penalties. A1 EURO $1.2716 Firms Try To Escape Health Penalties What’s News i HHHH $2.00 WSJ.com its own. Republican candidates are using a patchwork of tools to figure out which doors to knock on and what to say if they open. For Mr. Barkett, “there was some culture shock that things didn’t move at the same speed as they did at Facebook,” he says. “Big Data” is disrupting the business of American politics just as it is other industries. Ever since President Barack Obama’s re-election team showed that candidates could use data to squeeze out every last vote, other political operatives have been trying to catch up, changing not only how campaigns are run but who runs them. Today, both parties are devising increasingly sophisticated methods to track political behavior through voting history, conPlease turn to page A4 MAGENTA BLACK CYAN YELLOW