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WEEKEND

China’s ComingSlowdown

REVIEW

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n J.P. Morgan agreed to$5.1 billion in settlementswith Fannie Mae and FreddieMac, but a larger pact withthe Justice Department ishung up over a spat with oneof the bank’s regulators. A1n Big banks tapped largeramounts of loan-loss reservesto pad profits in the third quar-ter than earlier in the year. B1n Brazilian tycoon EikeBatista’s troubled oil com-pany OGX is set to file forbankruptcy protection inBrazil in coming days. B1n Stocks climbed on strongresults from technology com-panies. The Dow closed up61.07 points at 15570.28. B5n China unveiled a guide-post intended to give thenation’s banks greater sayover interest rates. B2n Boeing and Lockheed planto make a joint bid on a newbomber to replace the agingB-52 and B-1 jets. B4n P&G reported an 8% risein profit for its first quarterunder returned Chief Execu-tive A.G. Lafley. B3n UPS posted slightly bet-ter-than-expected earnings,helped by cost cutting. B3

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InsideNOONAN A13

ObamaCare IsTaking On Water

Tunisia’s Islamists andsecularists struggled

to find a path out of theirpower struggle, which hasparalyzed the country’sthree-year-old revolution. A6n The White House is press-ing lawmakers in Congressto hold back on new sanc-tions against Iran. A1n Japanese Premier Abeenvisions Japan taking a moreassertive leadership role inAsia to counter China. A1n The administration nameda UnitedHealth unit to over-see repairs to the troubledhealth-insurance website. A4n GOP Sen. Paul will opposeYellen’s nomination as Fedchairwoman unless the Sen-ate votes to increase scrutinyof the central bank. A4n Legislation that would al-low states to collect online salestaxes has emerged as a hot is-sue in Senate primary races.A5n EU leaders put off effortsto change the bloc’s migra-tion policy, despite a recentspate of deadly shipwrecks. A7n President Kirchner’sPeronist faction is expectedto do poorly in Argentinemidterm elections. A8

J.P. Morgan Chase & Co.agreed to $5.1 billion in settle-ments with mortgage-financecompanies Fannie Mae and Fred-die Mac, but a larger pact withthe Justice Department is hung

up over a spat with one of thebank’s regulators, according topeople close to the talks.

The deal unveiled Friday bythe Federal Housing FinanceAgency included $4 billion tosettle claims that J.P. Morganhad misled Fannie and Freddieabout the quality of nearly 129securities for which they paidabout $33 billion. The nation’slargest bank by assets didn’t ad-mit any wrongdoing in agreeing

to the settlement.About $1 billion of the settle-

ment came from claims broughtagainst J.P. Morgan, about $1.8billion came from claims madeagainst Bear Stearns Cos., and$1.2 billion from claims broughtagainst Washington Mutual Inc.In 2008, J.P. Morgan purchasedBear Stearns and the bankingoperations of Washington Mu-tual at the urging of regulatorsduring the financial crisis.

The agreement with the FHFAalso includes $1.1 billion to settleseparate demands from Fannieand Freddie that J.P. Morgan buyback loans the housing-financecompanies said had run afoul oftheir underwriting standards.

While Fannie and Freddiedon’t make loans directly, theysupport housing markets by buy-

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Obama,CongressClashOn Iran

WASHINGTON—The WhiteHouse is pressing Congress tohold back on new sanctionsagainst Iran, pitting the adminis-tration’s hopes for a re-energizeddiplomatic engagement againstthe growing concern of somelawmakers and foreign allies.

The Obama administration isarguing that diplomatic effortsneed more time to contain Teh-ran’s nuclear program. But anumber of Republican and Dem-ocratic lawmakers want to bringa new sanctions bill targetingIran’s oil exports and finances toa Senate vote by the end of nextweek. A similar bill cleared theHouse in July and is waiting tobe reconciled with the Senate’s.

“Iran needs to immediatelyend its systematic noncompli-ance with the repeated demandsof the U.N.,” said Rep. Eric Can-tor (R., Va.), the House majorityleader. “We all want negotiationsto succeed, but time is clearlyrunning out.”

Senators have delayed actiononce already, after Wendy Sher-man, the undersecretary of state,asked for a chance to meet theIranians in Geneva on Oct. 15and 16 to restart negotiations.The White House, which re-garded the Geneva meeting as asuccess, intensified its outreachto Congress this week, and saidthat American negotiatorsneeded more “flexibility” to pur-sue the diplomacy in the coming

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BY JAY SOLOMON

J.P. Morgan SettlesWith Fannie, Freddie

Over the summer, something sprang up in theview from Dorsey Johnson’s back deck north ofDenver, where she watches sunsets over Colorado’sfront range.

It was a noisy, towering rig, drilling a new oil well.“There was clanking. There were trucks going by,’’

she says. All she wanted was for the rig to go away.Across the U.S., new oil and gas wells have

turned millions of people into the petroleum in-dustry’s neighbors. For many, the oil and gas com-panies are welcome newcomers bearing checks.Others consider the new arrivals loud, smelly anddisruptive. The drilling boom is firing up resent-ment in some communities when one person’s fi-nancial windfall means their neighbors abut aworking well.

The Wall Street Journal analyzed well location

and census data for more than 700 counties in 11major energy-producing states. At least 15.3 mil-lion Americans lived within a mile of a well thathas been drilled since 2000. That is more peoplethan live in Michigan or New York City.

The arrival of the Oil Patch in the nation’s back-yards is a result of an extraordinary U.S. energyboom driven largely by hydraulic fracturing, orfracking, a practice that makes it possible to tapinto dense, previously impenetrable shale forma-tions to extract fossil fuels. Fracking enabled thedrilling of the Niobrara Shale in Colorado, as wellas the Marcellus Shale in Pennsylvania, the Bar-nett Shale in Texas and others.

The change can be dramatic. In Johnson County,Texas, in 2000, there were fewer than 20 oil andgas wells. Only a fraction of the residents of thismostly suburban county, south of Fort Worth,

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BY RUSSELL GOLD AND TOM MCGINTY

THE RIG NEXT DOOR

Energy Boom Puts WellsIn America’s Backyards

TOKYO—Japanese Prime Min-ister Shinzo Abe said he envi-sions a resurgent Japan taking amore assertive leadership role inAsia to counter China’s power,seeking to place Tokyo at thehelm of countries in the regionnervous about Beijing’s militarybuildup amid fears of an Ameri-can pullback.

In an exclusive, wide-ranginginterview with The Wall StreetJournal, Mr. Abe also defendedhis program of economic re-forms against growing criticismthat the package lacks sub-stance—though he offered fewdetails of new programs, or atimetable, that anxious foreigninvestors have been seeking.

“I’ve realized that Japan isexpected to exert leadership notjust on the economic front, but

also in the field of security inthe Asia-Pacific,” Mr. Abe said,referring to his meetings withthe region’s leaders at a series ofsummits this month.

In his continuing attempt tojuggle his desire to enact eco-nomic-stimulus policies with theneed to pay down Japan’s mas-sive debt, the prime ministersaid he was open to reviewingthe second stage of a planned in-crease in the sales tax in 2015 if

the economy weakens after thefirst increase is implemented inthe spring.

Less than a year after takingoffice, Mr. Abe has alreadyemerged as one of Japan’s mostinfluential prime ministers indecades. He has shaken up thecountry’s economic policy in anattempt to pull Japan out of atwo-decade-long slump, andplotted a more active diplomacy

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BY GERARD BAKERAND GEORGE NISHIYAMA

Abe Sees a Resurgent JapanLeading Response to China

Olympic Torch’s Historic Visit

NORTHERN LIGHTS: Torch-bearers at the North Pole mark the first such stop for the Olympic emblem, which will end its journey in Sochi, Russia.

OrganizingCo

mmitteeSo

chi2

014/AssociatedPress

MINNEAPOLIS—The WalkerArt Center bills itself as “a cata-lyst for the creative expressionof artists and the active engage-ment of audiences.” Exhibits atthe architecturally striking com-plex feature the works of impor-tant names such as Andy Warholand Edward Hopper.

Lately, the pre-eminent mod-ern art museum has also becomea catalyst for cat-video festivals.

It all happened quite by acci-dent. Last year, the Walker setout to do something lightheartedfor the tail end of its summeroutdoor program. One idea, from

an intern, justclicked: put out acat call for videosubmissions andgive an award forthe best in show.

Entries poured in.Ten thousand peoplejammed the freeevent. Some carriedcat masks; otherscame dressed in fullfeline finery. Every-body lapped up the content: 84minutes of cat videos, beamedon a 20-foot screen.

Since then, the Walker hasbeen inundated with requestsfrom around the world to reprise

its Internet CatVideo Festival. Ithas taken its showon the road to 27venues, from muse-ums to bars to acastle in Ireland. InAugust, it staged its2013 “edition” atthe Minnesota StateFair. A “GoldenKitty” statuette,fashioned by Hasbro

as a giant version of its new Mo-nopoly token, was awarded toGrumpy Cat, the famous Internetsour puss. On Friday, the Walkerbrought its feline flicks to Brook-

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BY SHELLY BRANCH

The Fur Flies as Feline Film Festivals Get Cattyi i i

Catdance Claims ‘Highbrow’ Mantel; Museum Says it Was There First

The ‘Golden Kitty’

Brazilian Tycoon’s Troubles

Jonathan Alcorn/Bloomberg News

OIL BARREN: OGX, the company of commodities tycoon Eike Batista, isset to file Latin’s America’s biggest bankruptcy case on record incoming days—a startling downturn for the former powerboat racer. B1

By Devlin Barrett,Dan Fitzpatrick

and Nick Timiraos

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