Opinion

The Great Debate

Let Japan help defend America — and itself

Members of Japan's Self-Defence Forces' airborne troops stand at attention during the annual SDF troop review ceremony at Asaka Base in Asaka

Japanese Prime Minister Shinzo Abe is now following through on actions laid out in his recent bold speech calling for Japan to defend allies who might be under attack.

But wait, you may ask, hasn’t the United States had a mutual security treaty with Japan for more than half a century?

Well, not quite. Yes, Washington has had a mutual defense-security treaty with Tokyo since 1951. But Japan is not committed to defending the United States or any of its armed forces. In fact, Japanese forces are prohibited from helping Washington in time of war — even if the war is in defense of Japan.

This goes back to the postwar U.S. Occupation of Japan and the creation of the Japanese constitution. Determined that Tokyo would never again pose a threat to its Asian neighbors or the United States, Occupation leader General Douglas MacArthur and his staff were sympathetic to Japanese pacifists’ proposal to include a no-war making article in the constitution, then being written with oversight by the Occupation authorities. This worked with the policies of then-Prime Minister Shigeru Yoshida, who wanted to focus on rebuilding the Japanese economy — without the distraction of creating a major defense force.

Japan's PM Abe speaks during a news conference at his official residence in TokyoSo Japan’s constitution prohibits engagement in war. Despite using the term “mutual” to describe the U.S.-Japan agreement, there has never been anything mutual about it. It has always been a unilateral U.S. guarantee of Japan’s defense.

What’s a leveraged ETF and what makes it dangerous?

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Larry Fink is sounding the alarm. The chairman and CEO of $4.4 trillion asset manager BlackRock is worried about leveraged ETFs (exchange-traded funds). Fink thinks they could “blow up the industry.” His statement is a little unclear, but the industry he’s referring to is probably ETFs themselves, not the global financial system.

Blackrock is itself a huge player in ETFs, but Fink says they’ll never get into leveraged version of the financial instruments.

So, what’s the difference between regular and leveraged ETFs?

Regular ETFs are designed to track the price of a specific set of securities, taking the place of traditional mutual funds that focuses on particular investment sectors or classes of stock. ETFs started in stocks, particularly indexes, but now cover all types of assets. In this way they are similar to a mutual or index fund, but can be bought or sold like a stock. Regular ETFs, particularly the ones that track broad indexes like the S&P 500, are pretty vanilla financial products. Sure, an index fund might be slightly better for achieving individual investment objectives, but ETFs generally have much lower fees than actively managed mutual funds.

NFL: Last sports bastion of white, male conservatives

New York Giants kicker Lawrence Tynes kicks the opening kick-off to start the first regular season game in the Giants new stadium against the Carolina Panthers in their NFL football game in East RutherfordBy almost any measure — TV ratings, the value of franchises, overall revenue, polls — the National Football League is by far both the most popular and successful professional sports league in America. A veritable juggernaut. Nothing seems to damage that popularity — not widely reported homophobia or the growing awareness of the dangers of head injuries or the accusations leveled in a lawsuit filed last week by 500 former players that they were pumped up with painkillers and sent back onto the field after being injured.

Why does the NFL have such a tenacious hold on the national consciousness — particularly that of white males, the primary fans of professional sports? It might be that the NFL, in both its high points and its low ones, encapsulates the prevailing white male conservative ethos of modern America better than any other league. The triumph of the NFL is a tribute to the triumph of American conservatism.

The Baltimore Ravens Chris Carr (25) fumbles the opening kickoff as he is hit by the New England Patriots Matt Slater (bottom) in the first quarter of their NFL football game in FoxboroughThe popularity of a sport is, to a large extent, a function of how well it expresses the zeitgeist — at least the male zeitgeist. For more than a century, baseball was America’s national pastime. It was pastoral — born in the 19th century, played on expansive greenswards, with  a leisurely pace and a deliberate strategy. All of which was a large part of its appeal in a rapidly modernizing society that surrendered those rural values grudgingly.

In Africa: U.S. promotes security, China does business

kerry-li4Secretary of State John Kerry and Chinese Premier Li Keqiang both made high-profile visits to Africa within a week of each other this month. Kerry sought to resolve the continuing violence in South Sudan and the Central African Republic, Li came bearing aid and investment deals.

The United States could learn something from Beijing’s economic playbook.

The two leaders’ agendas could not offer a more vivid picture of the different priorities that each power pursues in Africa. Washington plays regional peacemaker, while Beijing focuses intently on its long-term economic interests.

China’s two-way trade with Africa, for example, has grown by 30 percent a year over the last decade. It is now Africa’s largest trading partner, importing largely natural resources.  More than 85 percent of China’s imports from Africa consist of petroleum, copper, iron, and other raw materials needed to build China’s growing domestic infrastructure and fuel its continued economic growth.

from Breakingviews:

James Hoffa: Let sun shine on corporate donations

By James Hoffa
The author is a Reuters Breakingviews guest columnist. The opinions expressed are his own.

Companies increasingly are playing an outsized role in U.S. elections. In many cases, they donate money to advocate controversial policies that could antagonize their customers and undermine their businesses. Because so many of these contributions are not disclosed, however, shareholders are left in the dark and unable to evaluate potential conflicts or risks.

Investors are demanding improved corporate disclosures through shareholder resolutions and by urging the Securities and Exchange Commission to adopt new rules. Despite hundreds of thousands of letters from investors urging the agency to take action, it dropped the issue from its list of regulatory priorities earlier this year.

Eyewitness Views: From hope to horror in Tiananmen Square


Eyewitness View: From hope to horror in Tiananmen Square On Changan Avenue, a small crowd confronts the People's Liberation Army (PLA) in Tiananmen Square after the army stormed the square and the surrounding area the night before. This is near the location a day later where "Tank Man" confronted and momentarily halted a column of the army's tanks leaving the square. (Alan Chin)June 4, 1989. In Chinese the reference is usually made with just the numbers “Six Four,” like in English, “9/11.” As the 25th anniversary of the Tiananmen ...

View "Eyewitness View: From hope to horror in Tiananmen Square" on Spundge

Why Egyptians voted for Sisi

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Former army chief Abdel Fattah al-Sisi is set to win the presidential elections in Egypt this week, almost a year after Egypt’s military reasserted formal control following widespread revolts against Mohamed Mursi.

While a popular uprising preceded the military’s intervention last June, the counter-revolutionary crackdown that followed over the past nine months has soured many Egyptians against the current order. So why is Sisi going to be Egypt’s next president, and why would the same Egyptians who ousted Hosni Mubarak now clamor for another authoritarian military man to take power, rather than support a more inclusive democratic process? Is the clock being turned back?

Few observers outside Egypt understand the reason for Sisi’s popularity, which is based largely on the desire for security. Many Egyptians feel that the country has become chaotic: if forced to choose between the Muslim Brotherhood and the military, they prefer the military. While both are authoritarian organizations, the military has more experience, national loyalty, and respect for Egypt as a country, rather than part of a wider pan-Islamic region. Its view of Islam is more mainstream.

from Edward Hadas:

The problem with the Piketty problem

If a man is suspected of murder, arson and speeding, any prosecutor who focuses only on the last charge risks ridicule. That imagined situation has some bearing on recent criticism of Thomas Piketty, the best-selling French anti-inequality economist. The accusations are largely restricted to ways in which he has exceeded the limits of his data.

The Financial Times, the most prominent critic, has identified possible compilation mistakes and biased adjustments in Piketty's statistics on the history of wealth distribution. This is potentially a bit sloppy, but beyond that it's hard to get too excited. Revising the questionable numbers would not change the basic conclusion that wealth has become more concentrated in most countries over the last three decades.

More importantly, though, all Piketty's wealth data suffers from a much more fundamental error: It cannot be telling us what he says it does. In his widely praised book, "Capital in the Twenty-First Century", he concludes that elites are becoming wealthier and more powerful at the expense of the rest of the population. However, wealth information alone, based on the market value of financial holdings and other real assets, can't validate that claim. Incomes and, importantly, social factors also need to be considered.

from Bethany McLean:

How corporate jets fly under shareholder radar

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Men’s apparel retailer Jos. A. Bank may be best known for its incessant advertisements of all the merchandise it has on sale. “Could they advertise more? Could they sell less?” quipped Jerry Seinfeld. “We’ll give you three suits for $8! Just take it! Get it out of here!”

So in a twisted kind of way, it’s perfect that the company and its chairman of the board, Robert Wildrick, have recently pulled off a different kind of super sale. In March, competitor Men’s Wearhouse agreed to buy Jos. A. Bank -- for $65 a share, about a 55 percent premium to its share price last fall. Wildrick served as the chief executive officer until 2008, and is often given credit for growing the business from a struggling retailer into a national brand. He now has a consulting agreement with the company that pays him $825,000 a year, and has earned over $200,000 a year in his role as chairman.

Seinfeld might be surprised to hear it, but there is a piece of merchandise that Jos. A. Bank doesn’t advertise. According to Federal Aviation Administration records, Jos. A. Bank leases a private plane, and not just any private plane -- a high-end Dassault Falcon 2000EX. A reader of Jos. A. Bank’s financial statements would almost certainly not be aware of the existence of the plane.

from Stories I’d like to see:

A follow-up on Dasani, fitting Credit Suisse punishments, when Hollywood meets Beijing

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1. What happened to Dasani?

Remember Dasani Coates?

She’s the homeless Brooklyn girl whose plight the New York Times’ Andrea Elliott chronicled in a moving series of Times features last December. The last we heard about Dasani in the Times was this February 21 follow-up by Elliott and Rebecca R. Ruiz. They reported that New York City officials had decided to move 400 families, including Dasani’s, out of the squalid shelter where she had been living and into rent-supported apartments.

What’s happened since? One would think that with all the attention Dasani received -- much of it focused on how intelligent, articulate and determined she was in the face of unspeakable adversity -- that she might have been recruited by now into a prestige private school or otherwise showered with attention and even donations that would have dramatically improved her circumstances.

Is that true? What about her parents and siblings? And what about the trust fund established for the family following Elliott’s series?

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