The Wall Street Journal - 13.09.2019

** FRIDAY, SEPTEMBER 13, 2019 ~ VOL. CCLXXIV NO. 63 WSJ.com HHHH$4.

DJIA27182.45À45.41 0.2% NASDAQ8194.47À0.3% STOXX 600390.48À0.2% 10-YR. TREAS.g 16/32, yield 1.789% OIL$55.09g$0.66 GOLD$1,498.70À$4.30 EURO$1.1063 YEN108.

BYTOMFAIRLESS

ECB Cuts

Key Rate,

Revives

Bond

Program

Central bank tries to

spur flagging Europe

economy, but some

question if it will work

ahead of high-level negotia-

tions in October.

It comes as President Trump

moved on Wednesday to post-

pone until Oct. 15 a tariff in-

crease on about $250 billion in

imports that had been set to hit

on Oct. 1. He called the delay a

goodwill gesture as China

marks the 70th anniversary of

Communist rule on that date.

Chinese negotiators, mean-

while, are making plans to

boost purchases of U.S. agricul-

tural products, give U.S. com-

panies greater access to China’s

market and bolster intellectual-

property protections, people

familiar with their plans said.

China also made public this

week a series of exemptions to

its tariffs on U.S. imports.

PleaseturntopageA

FY1980 ’90 2000 ’

–1.

–1.

–1.

–0.

–0.

–0.

0

$0.25 trillion

U.S.federalbudgetdeficitsandsurpluses,annual

Note: 2019 is year to date. Fiscal year ends Sept. 30.

Source: Congressional Budget Office

2019

–$1.09 trillion

togs have taken over neighbor-

ing weekdays. Ties are turning

tail.

The armed forces were

among the holdouts, but the

last lines of defense are crum-

bling. Never mind beards. The

U.K. army now allows tattoos

on hands and the backs of

necks, a street fashion that can

still raise eyebrows in some of-

fices.

Armed forces, traditional

bastions of male virility, have

wrestled with how much they

need to reflect societies they

protect, such as whether to al-

low gay enlistees or women in

PleaseturntopageA

For the past century, the

U.K.’s Royal Air Force held firm

against a persistent menace to

the British order.

The RAF has now decided to

let beards grow, and many cur-

rent and former military men

are bristling. “It’s about disci-

pline, about high standards,”

said Stewart Hill, a former U.K.

army lieutenant colonel. “Psy-

chologically, you are saying, ‘I

am now shaved, and I am ready

for war.’”

Battles to maintain formal

attire in the workplace have

largely quieted. Casual Friday

BYJAMESMARSON

Armed Forces Sound a Retreat in

The Battle of the Beard

iii

The U.K.’s Royal Air Force is the latest

to surrender to facial fashion

China Seeks to Narrow

Trade Talks With U.S.

China is looking to narrow

the scope of its negotiations

with the U.S. to only trade mat-

ters, seeking to put thornier

national-security issues on a

separate track in a bid to break

deadlocked talks with the U.S.

Chinese officials hope such

an approach would help both

sides resolve some immediate

issues and offer a path out of

the impasse, people familiar

with the plan said.

The move is the latest in a

series of steps officials in

Washington and Beijing are

taking to ease trade tensions

ByLingling Weiand

Chao Dengin Beijing

andJosh Zumbrun

in Washington

When the West Contra Costa Unified

School District in California needed money to

repair and upgrade deteriorating classrooms,

it hired Piper Jaffray Cos. to sell $191 million

of municipal bonds.

As far as school officials knew, the March

2016 sale went off flawlessly, enabling the

district to refinance older debt and tackle

tasks such as removing asbestos and upgrad-

ing science labs.

However, within a day of the initial sale,

the original buyers sold, or “flipped,” $

million of the district’s bonds for a profit of

$306,000, a Wall Street Journal analysis of

trading in the bonds found.

Within 10 trading days, the post-offering

trading had generated $1.24 million of mar-

ket-adjusted profits. Piper Jaffray partici-

pated in some of that trading, buying back

bonds and reselling them.

Newly issued municipal bonds, which are

marketed as long-term investments, aren’t

supposed to trade like that. The post-offering

buying and selling suggests West Contra

Costa’s bonds—sold in what is called a nego-

tiated offering—were initially underpriced.

That means the district will pay more in in-

terest over the life of the bonds than it would

if the bonds had been priced closer to what

subsequent investors paid.

“That’s money being left on the table that

costs taxpayers and rate payers and govern-

ments,” said Patrick Clancy, who recently re-

tired after 30 years as a financial adviser to

local governments issuing bonds. “That’s not

the way it’s supposed to go.”

A Journal analysis of municipal-bond data

found such post-offering trading to be rou-

tine. About $60 billion, or roughly 5%, of

PleaseturntopageA

BYTOMMCGINTY ANDHEATHERGILLERS

TOMORROW

WSJ.

MAGAZINE

kevin

durant

FRANKFURT—The European

Central Bank cut its key inter-

est rate and launched a sweep-

ing package of bond purchases

Thursday that lays the ground-

work for a long period of ultra-

loose monetary policy, jolting

European financial markets and

triggering an immediate re-

sponse from President Trump.

The ECB’s pre-emptive

move was aimed at insulating

the eurozone’s wobbling econ-

omy from a global slowdown

and trade tensions. It is the

ECB’s largest dose of monetary

stimulus in 3½ years and a

bold finale for departing Presi-

dent Mario Draghi, who looks

to be committing his successor

to negative interest rates and

an open-ended bond-buying

program, possibly for years.

But the move triggered op-

position from a handful of ECB

officials, according to people

familiar with the matter, while

leaving key practical questions

unanswered. Primarily: How

long can the ECB keep pur-

chasing bonds without signifi-

cantly enlarging the pool of as-

sets it can buy? Some analysts

estimated it might be less than

PleaseturntopageA

Former Vice President Joe Bi-

den and Sens. Elizabeth Warren

and Bernie Sanders clashed

sharply over the role of govern-

ment in the nation’s health-care

system as the three faced off for

the first time in the third Demo-

cratic presidential debate.

The candidates largely agreed

on what they see as the most im-

portant issues facing the coun-

try—a lack of universal health

care, income inequality, the

threat of climate change and the

prevalence of mass shootings—

but they diverged on how to ad-

dress them. Mr. Biden, who has

been atop the polls, drew fire

from several of the candidates,

but they saved the sharpest

words for President Trump over

ideological fault lines in the

Democratic field on the issue.

Mr. Biden pitched his candidacy

as building on Mr. Obama’s work,

while Ms. Warren and Mr. Sand-

ers embraced the former presi-

dent but cast Mr. Biden’s ap-

proach as too timid.

Mr. Biden lobbed broadsides

at Mr. Sanders over his Medi-

care-for-All plan. The proposal,

which Ms. Warren has endorsed,

would move every American

onto a government-run health

insurance plan regardless of

whether they have insurance

through their employer.

“I think the Obamacare

worked,” Mr. Biden said, as he

cast Mr. Sanders’s proposal as

taking too long to implement

while many people don’t have

health care currently. Mr. Biden

has favored a public-option ap-

proach in which a government-

operated program would com-

pete with private insurers.

Mr. Biden also went after Mr.

Sanders and Ms. Warren over

their calls to increase taxes to

pay for their ambitious health-

care proposal.

“It’s not a bad idea, if you like

it. I don’t like it,” Mr. Biden said.

But Ms. Warren of Massachu-

setts defended her position as

the next iteration of Mr. Obama’s

Affordable Care Act.

“We all owe a huge debt to

President Obama, who funda-

mentally transformed health care

PleaseturntopageA

his rhetoric and trade policies.

The debate, while heated at

times, appeared to do little to

change the state of play, as Mr.

Biden, though halting in some of

his responses, largely weathered

the attacks. Ms. Warren and Mr.

Sanders remained united in ad-

vocating policies that would fun-

damentally alter the U.S. govern-

ment and economy.

While the candidates praised

former President Obama’s pas-

sage of the Affordable Care Act,

Thursday’s debate exposed the

ByChad Day,Eliza

Collins

andEmily Glazer

Top 2020 Democratic Rivals

Spar on Health Care in Debate

Budget Gap Widens to $1 Trillion

The U.S. budget gap passed the $1 trillion mark in the first 11

months of the fiscal year, the first time year-to-date deficits

have topped that amount in seven years. A

Wall Street Flips Bonds,

Towns and Schools Pay Price

Data analysis suggests new municipal issues often are underpriced

Stimulus Salvos

 Germans snub plea to

boost spending................... A

 Bank’s move highlights

divergence in growth....... A

 Heard on the Street:

Running out of options... B

CONTENTS

Banking & Finance... B

Business News B3,5-

Crossword............... A

Heard on Street. B

Life & Arts....... A10-

Mansion............. M1-

Markets..................... B

Opinion.............. A13-

Sports........................ A

Technology............... B

U.S. News............. A2-

Weather................... A

World News....... A6-

s2019 Dow Jones & Company, Inc.

All Rights Reserved

>

What’s

News

Biden, Warren andSand-

ers clashed sharply over the

role of government in the

nation’s health-care system

as the three faced off for the

first time in the third Demo-

cratic presidential debate.A

China is lookingto narrow

the scope of its negotiations

with the U.S. to only trade

matters, seeking to put thorn-

ier national-security issues

on a separate track in a bid

to break deadlocked talks.A

U.S. business groupsare

intensifying efforts to win

passage of the administra-

tion’s trade agreement with

Canada and Mexico.A

A House panelformalized

procedures for its investiga-

tion into whether to recom-

mend articles of impeach-

ment against Trump.A

The administration said

oil drilling in part of Alaska’s

Arctic National Wildlife Ref-

uge would have a negligible

environmental impact.A

The EPA rescindedan

Obama-era policy that ex-

panded oversight and the

threat of steep fines for pol-

luting smaller waterways.A

The administrationturned

over a key piece of informa-

tion to lawyers for 9/11 vic-

tims’ families who are suing

the Saudi government.A

Russian authorities

raided the homes and of-

fices of political opposition

activists across the country

in a coordinated strike.A

A preliminary reporton

the deadly diving boat fire

off California’s coast said

the entire crew was asleep

when the blaze began.A

T

he ECB cutits key in-

terest rate and launched

a sweeping package of

bond purchases that lays

the groundwork for a long

period of ultraloose mone-

tary policy, jolting European

financial markets.A1, A

U.S. stocks roseafter

the ECB unveiled its stimulus

efforts and U.S.-China trade

tensions showed signs of eas-

ing. The Dow gained 0.2%.B

WeWork’s parenthas

chosen to list on Nasdaq and

plans sweeping governance

changes as the firm speeds

up preparations for its IPO.B

Juul is debatinginternally

whether to embrace or push

back on part of the adminis-

tration’s plan to pull most e-

cigarettes from the market.B

OxyContin maker Purdue

canceled plans earlier this

year to launch a foundation

to fund opioid-addiction

treatment and research.B

A coalitionof state attor-

neys general is zeroing in on

Google’s dominant presence

in the digital-ad market, ac-

cording to a civil subpoena.B

Federal regulatorshave

ordered Google to assure

employees they are allowed

to speak out on political

and workplace issues.B

Global investment bankers

launched the underwriting

process for the initial pub-

lic offering of Saudi oil com-

pany Aramco in Dubai.B

OPEC andits oil-produc-

ing allies put off talk of fur-

ther output reductions.B

A high-ranking UAWoffi-

cial was charged with embez-

zlement of union money, as a

corruption probe into the

union gains momentum.B

Business&Finance

World-Wide

Sen. Bernie Sanders, former Vice President Joe Biden and Sen. Elizabeth Warren were among the 10 Democratic presidential hopefuls

facing off Thursday night in the party’s third primary debate at Texas Southern University in Houston.

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