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Silicon Valley isn’t the only place where the dominance of big companies is raising concerns about oligopoly. John Gapper writes in his column that the same situation is arising on the US east coast because fund managers BlackRock, State Street and Vanguard have proved to be so successful at attracting investors to their index and exchange traded funds.

The explosion of passive investment funds run by these three companies raises complicated governance issues. First, these investors operate at such a scale that they tend to take a common approach to all companies. This is effective in imposing minimum standards in matters such as executive pay, but it does not amount to engaging deeply with corporate strategy in the same way as activist investors, John argues. And second, having so few investors holding so much power is worrying.

Janan Ganesh takes a close look at how the US is faring under President Donald Trump and concludes that the constitution is doing its job, with both the judicial and legislative branches are placing a check on the president.

Kay Bailey Hutchison, the American ambassador to Nato, writes that the alliance is holding up well in the face of Russian threats and insists the US will hold Moscow’s feet to the fire over violations of the Intermediate-range Nuclear Forces treaty.

Henny Sender concludes that in rural India, the good days may be over for prime minister Narendra Modi because his party promised to invest in opportunities for the young, but has not delivered.

Jamil Anderlini observes that the recent Huawei arrest offers clues to the US trade war psyche. Technology transfer is behind the tensions but history is not on Washington’s side.

What you’ve been saying

Second vote is no betrayal: letter from Lord Renwick of Clifton, London W1, UK

Just over half the electorate voted to leave, just under half to remain, but no one voted to leave while remaining indefinitely under all EU laws and regulations over which we will no longer have any say, with no exit possible without the permission of the EU. The idea that a second referendum would be a betrayal of democracy is simply laughable.

In response to “ We must rethink the purpose of the corporation”, Fotherington-Tomas says:

Interesting piece. I believe that it points to a general moral malaise in the developed world, where shareholders, fund managers, and pension funds seek maximum value out of resources without regard to their depletion. Goose and golden egg. On the other hand, merely to ease the pressure on the gas /accelerator opens the door to the possibility of lazy management. Good luck to us all to fix that.

Ghosn is entitled to protection from France: letter from Ryszard Bociong, Warsaw, Poland

I do not know whether the accusations formulated towards Carlos Ghosn by Japanese prosecutors have any foundation ( December 10). I do know, however, that unless proved otherwise an accused is innocent and that is the case of Mr Ghosn today. All the more the treatment inflicted on him by the Japanese legal system — keeping him in detention for now nearly a month with the possibility of further prolongation — is, in my opinion, totally not conforming to what should be the norm in democratic societies; ie, arrest for a maximum of 48 hours unless a court ruled otherwise. Explanations that each country has its own legal customs and rules are entirely unconvincing. Mr Ghosn is a French citizen who is entitled to protection by the French government. I hope and trust the appropriate French authorities are acting appropriately.

Today’s opinion

Theresa May clings on but nothing has changed for her
PM survives crucial vote but confirms the impression of a zombie leader

Markets Insight: Renminbi will not be able to escape a Chinese slowdown
Currency will be under pressure no matter how the US-China trade battle unfolds

Lombard: Superdry sweats through thick coats and hoodies for another year
Fashion retailer could have been faster to adapt to changes in climate and fashion

The FT View: Donald Trump makes Huawei CFO Meng Wanzhou a bargaining chip
Rule of law in America must not be a function of the president’s whim

Lex: US banks — Wail Street
Sharp sell-off in 2018 does not match a strong US economy

Lex: Investment consultants — pension tension
Some believe consultants should be forced to spin off their fiduciary businesses

Lex: Dixons Carphone — hang ups
Shareholders want a fix for group’s mobile division but such hopes remain on hold

Lex: Pernod/Elliott — the naked truth
Shouty, New York-style activism plays poorly in Europe

FT Magazine: Wiping the slate clean — is it time to reconsider debt forgiveness?
‘Debt is still sometimes wiped out in our modern world — through bankruptcies, defaults or sovereign debt restructuring plans — but these events are aberrations, not the norm’

Lex: Credit Suisse — Thiam to think
Bank’s basic strategy is sound but more volatility is surely on the way

In rural India, the good days for Narendra Modi may be over
The BJP promised to invest in opportunities for the young, but has not delivered

The US constitution is working to constrain Donald Trump
Both the judicial and legislative branches are placing a check on the president

beyondbrics: Eskom’s debt is draining South African growth
Faced with tough choices, the government will kick the problem further down the road

Free Lunch: Nobel economics lessons on climate change
Prize lectures leave no doubt about the need for carbon taxes

Nato is the best defence against Russian aggression
The US remains committed to its allies in the face of Moscow’s reckless behaviour

Huawei arrest offers clues to the US-China trade war psyche
Technology transfer is behind the tensions but history is not on Washington’s side

FT Magazine: Some New Year’s resolutions for Musk, Bezos and Zuckerberg
‘I suggest Musk turns over a healthy new leaf — and becomes truly boring’

The FT View: Germany tries to break the impasse on migrants
Scrapping compulsory quotas for EU countries is welcome if belated

Instant Insight: A leadership challenge against Theresa May is a high-risk strategy
Even if the rebels prevail, the Brexit fundamentals remain the same

FT Alphaville: Further reading

Index fund managers are too big for comfort
Investors such as BlackRock cannot keep quiet and hope that no one will notice them

FT Alphaville: Turkey’s central bank can’t cut interest rates just yet

Markets Insight: Investors can smooth out friction wrought by deglobalisation
Markets act as mechanisms to help allay tension between countries and central banks

Lombard: Accountants look more closely at misconduct than listed groups
Ownership structures mean partners have a personal interest in deterring behaviours

FT View

The FT View: Donald Trump makes Huawei CFO Meng Wanzhou a bargaining chip
Rule of law in America must not be a function of the president’s whim

The FT View: Germany tries to break the impasse on migrants
Scrapping compulsory quotas for EU countries is welcome if belated

The Big Read

The Big Read: China — foreign asset managers eye a vast savings pot
Beijing is opening the door to overseas investment managers but it is unlikely to let the world’s biggest firms dominate its market

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