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* * * * * * MONDAY, AUGUST 18, 2014 ~ VOL. CCLXIV NO. 41 WSJ.com HHHH $2 .00

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CONTENTSAbreast of the Market C1Corporate News.... B2,3Global Finance............ C3Heard on the Street C6Law Journal................ B4Markets Dashboard C4

Media............................... B5Moving the Market C2Opinion................... A11-13Sports.............................. B6U.S. News................. A2-4Weather Watch........ B5World News............ A5-9

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What’sNews

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World-WidenAMissouri teen killed bypolice was struck by six bul-lets, including two to the head,an autopsy found. Vandalismerupted after a march. A1, A4nU.S. aircraft and dronespounded Sunni rebel positionsas Washington and the Kurdspushed to end Islamic State’ssiege of Mosul Dam. A1, A5nNetanyahu warned Hamasmust stop mortar and rocketfire for the Gaza conflict toend, as Israel and the Palestin-ians resumed indirect talks. A5n Four foreign ministersmetto renew efforts on Ukraine,but fierce fighting there of-fered little hope for a truce. A8n Two freight trains carry-ing toxic chemicals collidedhead-on in Arkansas, killingtwo train crew members. A3n A gun-control group willpress Kroger to dissuade peo-ple from openly carryingarms in its supermarkets. A3nTexas Gov. Perry defendedhis threat to veto funds for aprosecutor, a move that led tothe Republican’s indictment.A4n Pope Francis ended his in-augural visit to Asia with a callfor peace in the Korean penin-sula at a Mass in Seoul. A6n Pakistan’s Imran Khancalled for widespread civildisobedience in a bid to oustthe Sharif government. A6nAngry Liberians raided aquarantine center, raisingfears Ebola could spread inthe capital’s largest slum. A9n Libyan rebels battled inparts of Tripoli, ignoring inter-national calls for a truce. A9

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B ig institutions are snap-ping up U.S. junk bonds,

taking advantage of a slidein prices triggered by an ex-odus of retail investors. A1n China’s biggest banks havestarted raising a planned $73billion in debt and equity tobeef up reserves, a tally ex-pected to top $300 billion. C1n Credit Suisse helped sellbillions of dollars of securi-ties that played a role in theEspírito Santo collapse. C1n European stocks haveslumped on economic woesand geopolitical strife, foilingforecasts of a comeback. C1n Corn farmers, processorsand traders are bracing for arecord U.S. harvest, likelydriving prices even lower. C1n The Sultan of Brunei hasoffered to pay about $2 billionto buy New York’s Plaza andtwo other luxury hotels. B3n FedEx was accused of con-spiracy to launder money inconnection with a governmentprescription-drug case. B3n Sonic Automotive plansto open a line of used-carstores this fall in a bid tocompete with CarMax. B3n Leucadia has agreed toinvest $400 million in for-mer SAC executive Kumin’sstartup hedge fund firm. C3n PwC will pay $25 million tosettle New York state allega-tions the firm mishandledwork for a Japanese bank. C6nNatural-gas prices, buoyedby forecasts for a hot sum-mer, have slid 20% sinceJune due to cool weather. C3

Business&Finance

Large institutions are snappingup U.S. junk bonds, taking advan-tage of a price slide triggered byan exodus of individual investors.

Many big money managers saythey remain bullish on these riskycorporate bonds despite concernsthat the market is overheated andworries that geopolitical unrestcould fuel a rush to safer assets.

Their interest stands in con-trast to a wave of selling by retailinvestors, who sucked almost $13billion out of junk-bond mutualfunds and exchange-traded funds

in the four weeks ended Aug. 6.Analysts said upheaval in

Ukraine, Iraq and Israel unsettledsome investors, and concerns thatprices were already too highdrove some smaller investors tosell. They worried that the multi-year record-breaking run of junkbonds might be near an end.

That presented a buying op-portunity for larger investors,who say the $1.6 trillion U.S. junk-bond market remains healthy andnote that many bonds are nowcheaper than before.

Gershon Distenfeld, who over-Pleaseturntothenextpage

BY KATY BURNE

Large Investors SwoopIn to Buy Junk Bonds

DERIK, Syria—U.S. jets, dronesand bombers pounded Sunni in-surgent positions on Sunday toease the siege of the strategicallyvital Mosul Dam, as Washingtonand its Kurdish allies turned uppressure on the radical group Is-lamic State.

The militants retreated fromsome of their positions aroundthe dam, the latest front acrossIraq where Kurds have gained inrecent days with the aid ofstepped up U.S. air attacks, advis-ers and weapons, and a contro-

versial new ally: fighters from aKurdish guerrilla force that Wash-ington considers a terror organi-zation.

Hundreds of guerrillas linkedto the Kurdistan Workers’ Party,or PKK, have this weekend foughtin a broader Kurdish offensiveagainst the insurgents under U.S.air cover. They joined the semiau-tonomous Iraqi Kurdish region’sPeshmerga forces around the re-gional capital of Erbil and the Sin-jar mountains, where thousandsfrom the Yazidi religious minorityhave been trapped by the rapidadvance of Islamic State fighters.

It wasn’t immediately clearwhether PKK guerrillas were as-sisting in the Kurdish ground of-fensive launched Sunday in con-junction with U.S. air attacks toretake the Mosul Dam.

Nevertheless, the emergenceof the PKK—an umbrella organi-zation that fights under differentnames in Syria, Turkey and Iraq—as a key player in the battleagainst the Sunni radicals is an-other stark example of how therise of the Islamic State is scram-bling diplomatic and battlefieldalliances.

Last week, PKK commanders

said they met U.S. advisersdropped on Mount Sinjar to as-sess the humanitarian crisis thereand had “constructive discus-sions.”

A U.S. defense official couldn’tconfirm whether the meetingtook place and stressed in re-sponse to reports that the PKKwas fighting alongside the Pesh-merga that “it’s hard to tell fromWashington who’s on the frontline in a Kurdish-Iraqi fight.”

The U.S. has designated thePKK a terrorist organization, andthe U.S. “doesn’t do business

PleaseturntopageA5

BY JOE PARKINSON

Kurds Push to Take Key DamU.S. Airstrikes Help Fighters Gain Against Iraqi Militants; a Controversial New Ally

CARROLLTON, Ga.—BrandiShirey wants to borrow at least$20,000 to expand the birthday-and wedding-cake business shestarted four years ago after leav-ing her job as a bookkeeper.

Demand for the cakes, whichsell for $150 to $500, overwhelmsher home kitchen. She plans touse about $2,000 from her sav-ings to move into a nearby store-front next month. But the 28-year-old Ms. Shirey believes hercredit record and financial paper-work have to be bulletproof be-fore she dares approach a bankfor a loan. “It’s time to grow,”she says, but things “aren’t whatthey used to be.”

Across the U.S., small-business lending has beenstuck in a slow, grinding recovery behind mostother types of business and consumer loans. At the

end of the first quarter, banksheld $585 billion in loans tosmall businesses, up 1% from lastSeptember but still 18% less thanthe peak of $711 billion in 2008,according to the Federal DepositInsurance Corp.

The number of loans for $1million or less held by banks isdown about 14% to 23.5 millionsince 2008. In nearly one-thirdof all U.S. counties, small-busi-ness lending remains below2005 levels, estimates PayNetInc., a Skokie, Ill., tracker ofloans by banks, corporations andalternative lenders such as fi-nance companies.

In contrast, loans to busi-nesses of all sizes totaled $2.48trillion as of March 31, up 9%since 2008. Federal Reserve data

show that overall loans and leases grew in the sec-ond quarter at the highest quarterly rate since the

PleaseturntopageA10

BY RUTH SIMONAND ANGUS LOTEN

NO CREDIT

Small-Business LendingStuck in the Slow Lane

LaggingSmall-business lending isn’trebounding as fast as otherbusiness lending.

Source: FDIC The Wall Street Journal

$2.5

0

0.5

1.0

1.5

2.0

trillion

’08 ’09 ’10 ’11 ’12 ’13

Business loans of $1 millionor less held by banks

All business loansheld by banks

Ahm

adal-Rub

aye/AgenceFrance-Presse/Getty

Images

The inscription on a noveltymug for sale at the ShakespeareTheatre Company’s gift shop inWashington always gets a riseout of veteran trial lawyer DavidEpstein.

It isn’t the line itself: “Thefirst thing we do, let’s kill all thelawyers.” It is that so few peoplesee it his way: The Bard wasn’tknocking lawyers, much less en-dorsing a litigicidal rampage, hesays, but defending them.

“I’m a lawyer. I get the ‘hu-mor,’ ” he says. “But I don’t likethis target on my back.”

Now, Mr. Epstein is among an

unhappy band of at-torneys who are toil-ing to, as they viewit, set the recordstraight.

The line comesfrom Shakespeare’s“Henry VI, Part 2”and is spoken byDick the Butcher, thedopey henchman ofrebel leader JackCade.

According to theattorneys’ interpretation—onesupported by many but not allEnglish scholars—Shakespeare’spoint is to portray lawyers asthe guardians of the rule of law

who stand in the wayof a fanatical mob.

The lawyers mayhave a good argu-ment, but more thanfour centuries afterthe play made its de-but, Dick theButcher’s words stillhaunt the legal pro-fession, enduring asshorthand for frustra-tion with excessivefees, frivolous law-

suits and ambulance chasing. It isplastered on mugs, T-shirts andposters and has popped up in ev-erything from an Eagles song to

PleaseturntopageA10

BY JACOB GERSHMAN

To Kill or Not to Kill All the Lawyers? That Is the Questioni i i

Attorneys Object to Interpretation of Shakespeare’s Line; ‘Not a Slur’

William Shakespeare

Iraqi Kurdish Peshmerga fighters on Sunday head to the Mosul Dam, which they retook from Islamic State militants. Kurds have gained groundin recent days with the help of U.S. airstrikes and guerrillas linked to the Kurdistan Workers’ Party, or PKK, a controversial ally.

TODAY IN MARKETPLACE

A High Bar for IvoryA High Bar for IvorySPORTS Jason Gay on a Little League History-Maker

Michael Brown, the unarmed18-year-old whose shooting by apolice officer set off more than aweek of unrest in Ferguson, Mo.,was struck by at least six bullets,including two to the head, ac-cording to a former New YorkCity medical examiner.

The autopsy results came as amarch protesting Mr. Brown’sAug. 9 death erupted in chaosSunday night when police forcedback demonstrators in a cloud ofsmoke and a hail of sizzling can-isters.

Michael M. Baden, who con-ducted a second, private autopsySunday for the Brown family,said wounds to the head andbrain were the likely cause ofdeath.

“There were at least six entrywounds, there might have beenseven, but we’ll have to correlatethat with what was found in thefirst autopsy,” he said. The firstautopsy was conducted by theSt. Louis County Medical Exam-iner’s office. The U.S. Justice De-partment announced Sundaythat it ordered its own autopsy.

Dr. Baden said all of the gun-shots were fired toward thefront of Mr. Brown’s body. Theresults of the autopsy were firstreported by the New York Times.

The retreat by marchers aftera weeklong protest campaign setoff widespread vandalism and

PleaseturntopageA4

BY JOE BARRETTAND MATTHEW DOLAN

AutopsyFinds6 ShotsKilledTeen

Federal authorities wade deeperinto teen’s death........................... A4

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