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TUESDAY, JANUARY 20, 2015 ~ VOL. CCLXV NO. 15
*****
DJIA 17511.57 Closed
NASDAQ 4634.38 Closed
i
STOXX 600 353.18 À 0.2%
10-YR. TREAS. Closed yield 1.815%
OIL $48.69 Closed
GOLD $1,276.90 Closed
i
Business & Finance
T
he Fed is staying on track
to start raising short-term
rates later this year, even as
the ECB is poised to launch a
stimulus program. A1, A8
n China’s growth slowed to
7.4% last year, its weakest rate
in almost a quarter century, after decades of expansion that
buoyed the global economy. A1
n Shanghai shares slid 7.7%
Monday, the worst drop in over
six years, on a move to curb
margin trading. Stocks were up
in early Tuesday trading. A9
n The IMF downgraded its
outlook for more than a dozen
of the world’s largest economies, including China. A8
n BP plans to argue that a
court should weigh oil prices
in deciding how much it must
pay in fines for the 2010 Gulf
of Mexico spill. B1, B7
n Many money managers
see stocks recovering this
year but worry about earnings and global growth. C1
i
Obama Reignites Tax Fight
i
World-Wide
n Obama is set to outline a
plan for tax increases and
higher government spending
in his State of the Union, reigniting partisan debates. A1
WASHINGTON—President Barack Obama’s plan for billions of
dollars in tax increases and
higher government spending, to
be outlined in Tuesday’s State of
the Union address, is reigniting
familiar partisan debates about
overhauling the tax code and
how to best aid the middle class.
The White House views Mr.
Obama’s proposals as the start
of a broad discussion with the
new Republican Congress over a
rewrite of the tax code that includes not just corporate but individual taxation, as GOP lawmakers have wanted. But in
By Carol E. Lee,
John D. McKinnon
and Kristina Peterson
calling for tax increases, the
White House may have complicated negotiations on an issue
that both parties recently cited
as ripe for compromise.
“This is just another poke in
the eye at Republicans, rather
than showing a willingness to
cooperate,” said Rep. Charles
Boustany (R., La.), a member of
the tax-writing Ways and Means
Committee. “If the president
Inside
n More Americans are upbeat
about the economy but remain
frustrated about political leadership, a new Wall Street Journal/NBC News poll found. A4
n Iran said an Israeli airstrike in Syria killed a Revolutionary Guards general and
six Hezbollah fighters. A6
Argentine Who
Accused Leader Dies
Wide Appeal Lifts
‘American Sniper’
n Saudi Arabia’s flogging of
a writer convicted of insulting Islam has renewed debate
over corporal punishment. A6
A prosecutor who said President
Kirchner helped quash a probe into
the bombing of a Jewish center was
found dead from a gunshot wound.
Film based on the memoir of
an Iraq War veteran sets openingweekend record, boosted by
audience of cultural conservatives.
n Nuclear talks between Iran
and six powers will resume
next month, the EU said. A7
CONTENTS
Arts in Review.......... D5
CFO Journal................. B6
Corp. News....... B2,3,5,7
Global Finance............ C3
Health & Wellness D2-4
Heard on the Street C8
Media............................... B4
Moving the Market C2
Opinion................... A11-13
Sports.............................. D6
U.S. News................. A2-4
Weather Watch........ B8
World News........... A6-9
>
s Copyright 2015 Dow Jones & Company.
All Rights Reserved
By Mark Magnier,
Lingling Wei
and Ian Talley
China, which reported economic
growth of 7.7% in 2013, has reverberated around the world,
sending prices for commodities
tumbling and weakening an already soft global economy.
China’s economy grew 7.3% in
the fourth quarter from a year
earlier, the National Bureau of
Statistics said, buttressed by targeted moves to ease borrowing.
But it continued to face a hous-
Composite
n Power outages rolled
through Brazil as drought hurt
hydroelectric generation. A7
China Economic Growth
Is Slowest in Decades
BEIJING—China’s economic
growth slowed to 7.4% in 2014,
downshifting to a level not seen
in a quarter century and firmly
marking the end of a high-growth
heyday that buoyed global demand for everything from iron
ore to designer handbags.
The slipping momentum in
 ECB nears crucial test............... A8
 IMF cuts growth forecasts..... A8
 Mounting worries hit stocks.. C1
Ltd. that will give it half ownership of five entertainment chanKAGGALAHALLI, India—On a
nels around the country that
Percentage of revenue from
visit to India last fall, Viacom
specialize in low-budget, localinternational operations, 2013
Inc. executive Bob Bakish rode
language soaps.
Until recently, such regional
30 miles south of Bangalore,
Discovery Communications
foreign fare wouldn’t have been
past rice paddies and millet
45%
on the menu of a U.S. media confarms, to a television-production
Time Warner
glomerate. But after years of goset in this village of 1,100.
29
He came to see the filming of
go growth, the U.S. pay-TV marViacom
the South Indian soap opera
ket is saturated, and consumers
“Lakshmi Baaramma,” a Cinderhave begun rebelling over high
26
costs by dropping cable and satella tale about a village girl who
Disney
marries a wealthy businessman
ellite connections altogether. In24
vesting in fast-growing foreign
to escape a life of oppression.
TV markets—however unfamiliar
That day they were shooting a
Source: Macquarie The Wall Street Journal
wedding scene in which the
the terrain or content—is lookbride and groom play a ceremoing more attractive.
Viacom’s India initiative is part of a broader
nial game, racing to fish their rings out of a pot of
move to step up channel launches, acquisitions
milk.
Soon, that show will be a Viacom production. and investments in countries ranging from the
The U.S. media giant, owner of TV networks in- U.K. to Brazil to Spain. Competitors such as Discluding MTV, Comedy Central and Nickelodeon, is covery Communications Inc., 21st Century Fox and
Please turn to page A10
completing a deal with India’s Reliance Industries
BY AMOL SHARMA
MARKETPLACE | B1
n Indonesian investigators
said they have found no signs
of terrorism or pilot suicide
in the AirAsia crash. A7
 Gerald Seib: How Obama might
address state of his party...... A4
Media Giants Look Far Afield
For New TV Audience
WORLD NEWS | A6
n European authorities probing terror networks are hampered by porous borders. A7
n German politicians criticized a decision by police to
ban an anti-Islam march. A7
n Protesters in Chechnya
denounced Charlie Hebdo’s
caricatures of Muhammad. A7
tives.
The plan would increase taxes
on investments held by high-income households by boosting
top capital-gains tax rates and
imposing capital-gains tax on
many inherited assets.
Republicans, who control the
House and Senate, have balked at
the president’s plan, calling it the
type of redistribution of wealth
that Mr. Obama has long known
Republicans oppose. But like Mr.
Please turn to page A4
Federal Reserve officials are
staying on track to start raising
short-term interest rates later
this year, even though long-term
rates are going in the other direction amid new investor worries about weak global growth,
falling oil prices and slowing
consumer price inflation.
The Fed’s stance, as it prepares for a policy meeting later
this month, is striking because
European Central Bank officials
are poised to take the opposite
approach later this week.
The ECB is nearing a decision
on whether to launch a controversial stimulus program known
as quantitative easing on Thursday. It is widely expected to announce it will buy hundreds of
billions or more of euro-denominated government bonds in an
effort to beat back Japan-style
deflation.
The world hasn’t seen an economic divergence like this since
the mid-1990s, when growth in
the U.S., Japan and Europe went
in different directions. Back then,
Japan was mired in a post-realestate bubble downturn, Europe
was grappling with the consequences of the collapse of the
Soviet Union and the U.S. was
enjoying a burgeoning technology boom.
The looming moves have important implications for markets
and growth. Investors have already been driving up the value
of the U.S. dollar in anticipation
of the moves and driving down
Please turn to page A8
FOREIGN CHANNELS
n The Argentine prosecutor
who accused President Kirchner of working with Iran to
cover up a 1994 terror bombing was found dead. A6
n Yemeni forces clashed with
militants who are seeking a
greater say in a new constitution, leaving nine dead. A6
were really interested in tax reform, rather than making political statements, he would have
approached Congress and members of the Ways and Means
committee in thoughtful ways.”
Mr. Obama surprised Republican leaders when the White
House announced over the weekend that he will propose some
$320 billion in tax increases
over 10 years that are targeted
at high-income Americans, and
to use that money to pay for
$235 billion in tax breaks mostly
for moderate-income workers,
plus other yet-unspecified initia-
ing glut, soaring debt and overcapacity in many industries, factors likely to erode growth in
2015.
Beijing had said it expected
“about” 7.5% growth in 2014.
The chief of the statistics bureau
said Tuesday the rate was within
that range.
Chinese stocks rose on the
news, a day after their largest
one-day drop in more than six
years following a crackdown on
margin trading.
While 7% growth would be
the envy of most economies, Beijing says at least this level is
needed to create enough jobs for
China’s huge population. The
Communist Party sees social stability as an essential component
in maintaining its grip on power.
The results follow decades of
Please turn to page A9
 Shanghai market plunges........ A9
Overseas Play
In Rome, Fiddling Mayor Makes Locals Burn
i
i
i
Crackdown on Rules Enrages Restaurateurs, Artists; Banning Scooters
BY LIAM MOLONEY
ROME—For a decade, Claudia
Pizzuti, owner of Tre Scalini restaurant in Rome’s Piazza
Navona, dished out pasta to
tourists at some 35 outdoor tables, serving up the languorous
meals and stunning views of the
Baroque square that are the stuff
of once-in-a-lifetime Roman holidays.
The fact that the tables—
which spilled into the piazza—
violated Ms. Pizzuti’s city license
was of little concern to the restaurateur.
That was until
Rome Mayor Ignazio
Marino declared war
on the rampant violation of rules governing outdoor tables
that had spread
willy-nilly over time.
“We had to do
away with the insane
invasion of the tables,” said Mr. Marino. “Do we
care about the beauty and architecture of our piazzas, or not?”
Last summer, City Hall sent
police to enforce the rules, compelling most restaurateurs to
P2JW020000-5-A00100-1--------XA
n Two deal makers are
launching an activist hedge
fund with a collaborative approach to management. C3
n Ackman’s Pershing Square
is hiring a veteran merger
lawyer as vice chairman. C3
i
ARMED RESISTANCE: Houthi militants, who want a greater say in the crafting of a new constitution, shouted slogans Monday during clashes with
government forces near the presidential palace in San’a. The fighting, which left nine dead, subsided with a late-afternoon cease-fire. A6
GOP Pans State of the Union Proposal to Boost Inheritance, Capital Gains Levies
n U.K. authorities closed an
accounting probe into H-P’s
$11 billion purchase of software company Autonomy. B1
YEN 117.57
BY JON HILSENRATH
AND BRIAN BLACKSTONE
Hani Ali/Xinhua/Zuma Press
n Google is close to investing
about $1 billion in SpaceX to
support satellite-based Internet service, valuing the company at over $10 billion. B1
n The EU is weighing a tax
on U.S. Internet firms such as
Google in its effort at a single
digital market in Europe. B3
EURO $1.1608
Fed Holds
To Plan
On Rates
Despite
Turmoil
Deadly Clashes With Militants Leave Yemen on Edge
What’s
News
i
NIKKEI 17014.29 À 0.9%
HHHH $3.00
WSJ.com
slash the number of
outdoor tables and
put the remaining
ones into the perimeter set out in their license.
Authorities
even took to painting
green lines demarcating the allowed areas
to reduce squabbling
with inspectors.
Today, patrons sit ear-to-jowl
in a smaller clutch of outdoor tables at Ms. Pizzuti’s restaurant.
But she still flaunts the ban on
gas-fired patio heaters and, when
Please turn to page A10
MAGENTA
BLACK
CYAN
YELLOW