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* * * * * MONDAY, DECEMBER 1, 2014 ~ VOL. CCLXIV NO. 129 WSJ.com HHHH $3 .00
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What’sNews
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World-Widen Lawmakers have lessthan two weeks to figure outhow to keep the governmentfunded amid a fight betweenRepublicans and the WhiteHouse over immigration. A1n Thousands of Iraqis whoserved the U.S. are in limbosince the State Departmentsuspended refugee process-ing in Baghdad in June. A1n Student protesters inHong Kong tried to seize newterritory, leading to a nightof scuffles with police. A13n The drubbing Taiwan’sruling party took in localelections could complicaterelations with China. A13n The GOP presidentialnomination race has drawn anumber of long-shot bids. A4n Darren Wilson won’t re-ceive severance after his de-cision to resign from the Fer-guson Police Department. A6n Rights groups denouncedan Egyptian court’s decisionto drop murder chargesagainst Hosni Mubarak. A8n An American couple inQatar were cleared of chargesrelated to their daughter’sdeath, but were barred fromdeparting the country. A8n Colombian rebels freed anarmy general, paving the wayfor further peace talks. A11n Voters in Switzerlandrejected an initiative thatwould have ended tax breaksfor wealthy foreigners. A10n Kabul has seen more vio-lence as Taliban insurgentsseek to drive out Afghani-stan’s foreign backers. A13
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Retail spending over theThanksgiving weekend
dropped 11%, in part becausepromotional activity beganwell ahead of the holiday. B1n Large bond funds areholding the most cash sincethe financial crisis, ahead ofan expected Federal Reserverate increase next year. A1n German utility E.ON saidit would split into two com-panies, with one focused onrenewables and a new oneon conventional energy. B1n Intel will supply the elec-tronic brains for a new ver-sion of Google’s Glass. B1n Freeport-McMoRan isclose to settling conflict-of-interest allegations related toits purchase of affiliates. C1n Pressure from OPEC willcause pain for U.S. energyfirms, but they probablywon’t slash oil output. B3n Energy stocks are on sale,but fears of a further slideare keeping buyers away. C1n Regulators are rampingup plans to train bank exam-iners in cybersecurity amidgrowing hacker threats. C3n A Deutsche Bahn unit isclaiming damages of poten-tially more than $3 billionfrom 13 airlines, for colludingto inflate airfreight fees. B3n Altice and Oi have enteredan “exclusivity agreement”to agree on the final termsof a deal for PT Portugal. B3nThe latest “Hunger Games”movie topped “Penguins ofMadagascar” to lead the holi-day weekend box office. B7
Business&Finance
WASHINGTON—Lawmakersreturning to Capitol Hill on Mon-day will have less than twoweeks to figure out how to keepthe government funded amid anacrimonious fight between Re-publicans and the White Houseover immigration.
With government funding setto expire Dec. 11, top Democratsand Republicans had hoped topass a so-called omnibus measurethat would tie together tailoredspending bills to fund the govern-ment through September 2015,the end of the fiscal year.
Democrats, who control theSenate only until January, wantto seal in deals that stretch asfar into next year as possible.GOP leaders, vowing to avoid arepeat of last fall’s partial gov-ernment shutdown, want to dis-patch lingering 2014 business sothey can begin the new year byshowing they can pass Republi-can-leaning legislation.
But it is unclear what Republi-cans will do to satisfy conserva-tives who want to express theiranger over President BarackObama’s decision to shield mil-lions of illegal immigrants fromdeportation. Some of these law-makers, emboldened by the GOP’Smidterm-election victories, seefunding bills as a way to opposethe president on immigration andother issues, while some also arelikely to object to spending levelsthey deem too high.
“The bigger-picture idea thatwe won an election so we’ll let[Democratic Senate leader]Harry Reid dictate the budgetuntil Oct. 1” of 2015 won’t pass
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BY KRISTINA PETERSON
FundingDeadlineAwaitsCongress
Large bond funds are holdingthe most cash since the financialcrisis as portfolio managers bracefor potential price swings and un-ruly trading ahead of an expectedFederal Reserve rate increase in2015.
The top 10 U.S. bond funds byassets held an average 6.6% oftheir portfolios in cash at their lat-est reporting date, said fundtracker Morningstar Inc. That isdouble the sum they set aside last
year and the most since 2007.The growing cash cushion high-
lights concern among some inves-tors in the $24.6 trillion bondmarket about declines in liquidity,or the capacity to buy or sell secu-rities quickly at or near a givenprice.
“Liquidity is like oxygen,” saidMatt Freund, chief investment of-ficer of mutual funds at USAA In-vestments who helps oversee$65.5 billion. “You take it forgranted when it’s there, and whenit’s not, things quickly die.”
The jitters come as trillions ofdollars have flowed into giantbond funds since the financial cri-sis, reflecting investors’ search forfixed income amid uneven eco-nomic growth and low interestrates that have induced massiveborrowing by companies and gov-ernments.
Bonds are perceived as saferthan many other asset classes fol-lowing the plunge in stock andcommodity prices that hammeredmany investors’ portfolios in2008. But the sharp rise in bond
prices in recent years—which wasabetted by ample central-bankdebt purchases such as the FederalReserve’s so-called quantitative-easing program that ended in Oc-tober—has sparked concernsamong many analysts and tradersthat bonds may run out of steam,hurting the performance of thosefunds that attracted the massiveinflows.
Central-bank stimulus hashelped send the yield on thebenchmark 10-year U.S. Treasury
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BY KATY BURNE
BondFunds LoadUp onCashPortfolio Managers Gird for Volatility Amid Expectations of a 2015 Rate Increase
For the millions of Americanscharged each year with misde-meanor crimes, justice can beblindingly swift.
In Florida, misdemeanorcourts routinely disposed of casesin three minutes or less, usuallywith a guilty plea, according to a2011 National Association ofCriminal Defense Lawyers study.In Detroit, court statistics show, adistrict judge on an average dayhas over 100 misdemeanor caseson his or her docket—or one ev-ery four minutes. In Miami, publicdefenders often hardly have timeto introduce themselves to theirmisdemeanor clients before thecases are over.
Years of aggressive policing tactics and tough-on-crime legislation have flooded the American courtsystem with misdemeanor cases—relatively small-
time crimes such as public drunk-enness, loitering or petty theft.The state courts that handle suchcharges often resemble assemblylines where time is in short sup-ply, according to judges and law-yers who work in the courts.Many poor defendants, despitetheir right to court-appointed le-gal counsel, don’t get lawyers,and those who do often receivescant help in the rush to resolvecases.
Judge Thomas Boyd, who han-dles misdemeanor cases in Ing-ham County, Mich., said recentlyhe sometimes finds himself argu-ing with defendants who seemtoo eager to admit wrongdoingwithout consulting a lawyer. “Ihave young black men coming in
to plead guilty, but I start questioning them and it’spretty clear that they don’t believe they committeda crime,” yet don’t think they have any chance of be-
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BY JOHN R. EMSHWILLERAND GARY FIELDS
‘MEET AND PLEAD’
Justice Dispensed in MinutesAs Petty Crimes Clog Courts
After enduring attempts on hislife while working as an inter-preter for U.S. troops in Iraq,Neshwan Kherallah received avisa to settle in the U.S. in 2008.So did some other members ofhis family, made eligible for reset-tlement by his service.
But as Iraq has devolved intosectarian conflict, his sister, eligi-ble for expedited refugee resettle-ment through another program,finds herself in a camp in Turkey,her prospects for immigrating tothe U.S. uncertain.
Amid the rise of Islamic State,thousands of vulnerable Iraqis arein a similar state of limbo sincethe State Department, citing se-curity concerns, suspended refu-gee processing in Baghdad inJune. Many of those affected are
minorities such as Mr. Kherallah’sfamily, who are Yazidis, a groupthat has been targeted by the mil-itants also known as ISIS.
The refugee crisis in Iraqprompted Congress in 2008 tocreate a program called the Spe-cial Immigrant Visa, which Mr.Kherallah received, to protectthose directly employed by theU.S. Also established was a fast-track program extending refugeestatus to Iraqis with other U.S.connections, such as workers forU.S. media and nonprofits, or rel-atives of wartime allies, such asMr. Kherallah’s parents and sib-lings. Since then, more than44,000 Iraqis have immigrated tothe U.S. under the two programs.
Today, 38,000 Iraqi applicantsare awaiting interviews for theexpedited refugee program, also
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BY MIRIAM JORDAN
Iraqis Who Served U.S.Seek Visas ... and Wait
Rap SheetPercentage of U.S. population instate criminal-record databases
The Wall Street Journal
Sources: Bureau of Justice Statistics;Census Bureau
40
0
10
20
30
%
1995 2000 ’05 ’10
2012: 32%
Wave of Suicide Attacks Rocks Embattled Syrian Border Town
FredericLafargue
CAMBRIDGE, Mass.—At a re-cent scientific conference here,Justin Werfel, a Harvard Univer-sity researcher who has studiedtermites in Africa, described tothe crowd his theory on why bugsare so disgusting.
It is all about evolution, Dr.Werfel said. Increased competi-tion among humans for fooddrove bugs to become ever moredisgusting to keep people fromeating them, he said.
Dr. Werfel used standard scien-tific methodology to develop histheory. His goal wasn’t to breaknew ground in entomology. It was
to take top place at the Festival ofBad Ad-Hoc Hypotheses, or BAH-Fest, a satirical conference on evo-lutionary biology held at the Mas-sachusetts Institute of Technology.
Six presenters, each armedwith reams of research, vied towin over a panel of judges with adifferent bogus scientific theory.The winner got a statue of Dar-win looking dubious—shouldersshrugging, hands turned upward.
“The lure of having that tro-phy on my desk at work is a verypowerful one,” said Dr. Werfel.His research to develop tiny ro-bots that can build complex sys-tems was inspired in part by themound-building termite coloniesof Namibia and featured on thecover of the journal Science ear-lier this year.
BAHFest, now in its secondPleaseturntopageA14
BY ANGELA CHEN
At This Event, There’s Madness in the Scientific Methodi i i
Fake Theories Compete in Satirical Contest; Belly Fat Is for Floating
Darwin statue
NEW ASSAULT: Islamist militants launched a series of suicide-bomb attacks this weekend near the besieged Syrian city of Kobani, along the Turkish border.Kobani’s Kurdish defenders claim the attacks on a border crossing point came from inside Turkey, which Turkish officials deny. More photos at WSJ.com
Fresh Violence Erupts in Hong Kong
SHOWDOWN: Police used pepper spray and batons to push backthousands trying to block government offices as pro-democracyprotests flared anew. At least 40 people were arrested, police said. A13
Reuters
Open field for GOP...................... A4
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