Posted 4 months ago | by Catoshi Nakamoto
Blackrock is the world’s largest asset manager, with a portfolio worth over $9.5 trillion dollars, and it has slowly started to creep its way into crypto as well. This firm doesn’t just have bags though, it has baggage as well. It has become notorious for its shady practices and seems to be on a path of world domination. In this video, we’re going to be doing a deep dive into the controversial investment firm Blackrock. Since it was founded in the late 80s, Blackrock has grown much larger than its older and more established competitors, and now owns many of the big names on Wall Street, including Merryl Lynch and Barclays Global Investors. The reach of this firm extends far beyond their own business as well.Read More
Let’s get it.
Blackrock now holds a 5% or greater stake in more than 97% of the S&P 500 companies, which earn significant capital gains, but more importantly, this also gives them voting rights as shareholders, which allows them to influence how companies are managed and how they do business.
Blackrock entirely dominantes the market for ETFs as well, accounting for more than 36% of the entire ETF market. Coming far behind in second place is Vanguard with about 20% of the market cornered.
This rise to the top would not have been possible without a cozy relationship with regulators in Washington DC. Blackrock is notorious for exploiting the regulatory revolving door strategy, where key figures move between head positions in government and industry to ensure that the businesses they’re connected to have an edge in the market. This goes both ways. Sometimes regulators are essentially bribed with promises of big salaries in future positions when leaving office in exchange for special treatment. In other cases, top executives become government officials and then use their new positions to help out their buddies and the businesses that they still personally own stock in. This is why we should never forget that Dirty Gary Gensler went straight from the board room at Goldman Sachs into the position of a regulator at the SEC.
Blackrock has been especially successful with this strategy, staffing itself with former Washington players and moving many of its own executives into government roles. The firm has also had a direct line to the Treasury Department and maintained almost daily phone calls since the days of the Bush administration.
Under the current administration, two former Blackrock executives have secured top economic positions. Former BlackRock investment executive Brian Deese is now in charge of the National Economic Council, and Wally Adeyemo, a former chief of staff at BlackRock is now a top official at the Treasury Department. Then you have Michael Pyle, someone who started out working for the Treasury Department, before leaving Washington to become a chief investment strategist at Blackrock, then eventually returning to Washington to take his current job as chief economic advisor to the Vice President. Trying to keep up with all this shifting around is enough to make you dizzy.
For a moment there in 2016, it even looked like Blackrock CEO Larry Fink would be in charge of the Treasury. That didn’t work out for Larry because of how the election ended up going, but that didn’t really matter, because someone from Blackrock managed to squirm their way into the treasury anyway.
This constant presence in Washington may have something to do with the close relationship that Blackrock has developed with the Federal Reserve. Blackrock was actually one of the biggest beneficiaries of the Fed’s money printing. In order to prop up the stock market during the economic challenges faced in 2020 and 2021, the Fed purchased billions of dollars worth of corporate bonds and ETFs, and there is one firm that got a majority of that business…You guessed it. Blackrock.
In the midst of all of this money printing chaos over the past few years, asset prices were on the rise because investors were afraid of inflation and looking for a better store of value. Housing prices have gone through the roof as well, and although Blackrock isn’t the only party to blame, they made the problem much worse. Blackrock began moving into real estate in a big way, now owning over 60 billion dollars in property assets. The firm has been criticized for driving up the price of housing and leaving many families priced out of the American dream. Some sources say that these accusations are overblown, but sometimes you wonder how much Blackrock is paying them to say that.
Despite its tight control of financial markets and heavy influence in politics, Blackrock has managed to maintain a surprisingly good reputation. In fact, Blackrock has recently begun LAPRing as an environmental activist organization, but we all know that Larry Fink is no Captain Planet.
Blackrock claims that their primary focus is ESG, which rates the Environmental, Social and Governmental impacts that different companies have. Oddly enough, these are all areas where Blackrock and every other firm on Wall Street has a very negative impact, so maybe this is something like a new year’s resolution, where you promise to do something totally out of character and then never follow through.
After the May flash crash of 2021, Ark Investment founder Cathie Wood suggested that Blackrock used concerns about ESG to pressure Tesla into reversing their position on Bitcoin. Meanwhile, the company was reported to own over 400 million dollars in Bitcoin mining stocks, not just Bitcoin, but Bitcoin mining specifically. When these firms are saying one thing in public and doing the exact opposite behind the scenes, you can be sure that they’re using the media and retail investors as pawns to fill their own bags.
Blackrock really doesn’t have any credibility when it comes to the environment. The firm owns a 6.7% stake in Exxon Mobil, a 6.9% stake in Chevron and a 6% stake in the mining company Glencore. This is just scratching the surface, Blackrock is invested in a variety of other ventures that have a much larger impact on the environment than using electricity.
Environmentalists have accused the firm of directly investing in companies that are destroying rainforests and forcing tribal people from their villages. This seems a bit more serious than using a few kilowatts of electricity, so maybe Blackrock should work on cleaning up their own investments before speaking on Bitcoin’s energy use.
Some governments around the world have started to recognize this hypocrisy. Last year, it was reported that the European Union was considering new conflict of interest legislation after Blackrock was awarded a government contract to work with regional banks to improve their ESG standing. Government officials said that Blackrock had no authority to instruct others on ESG compliance when they are standing behind some of the world’s worst offenders.
But that’s all I got, be blessed, Bitboy out.