What game is Blackrock playing?

Discussion in 'Wall St. News' started by themickey, Aug 18, 2021.

  1. ktm


    This damage will last for a very long time. Everything was so great in China until the gov't got an opportunity to show what it was truly capable of. We have a lot of politicians in the US that are drooling over that level of control and would do the same thing here if they had more power.
    #111     May 10, 2022
    murray t turtle likes this.
  2. ZBZB


    All governments tried, ripping up pandemic plans and copying the Chinese when covid started.
    #112     May 10, 2022
  3. themickey


    Ackman-backed anti-woke fund slams BlackRock and Vanguard
    Simon Foy May 11, 2022

    A US health and technology entrepreneur has raised $US20 million ($9 million) to launch an “anti-woke” investment fund that will urge companies to focus on making money rather than championing political causes.

    Vivek Ramaswamy, the author of Woke, Inc - who made his fortune investing in pharmaceutical companies - has won the backing of hedge fund manager Bill Ackman and billionaire tech entrepreneur Peter Thiel to launch the new venture, which is called Strive.

    Mr Ramaswamy said Strive would invest only in companies that focused on maximising profits and shun those that espoused political beliefs.

    The 36-year-old called his approach “excellence capitalism”, saying companies should be concerned only with making money, and hit out at the creeping liberalism from what he dubbed the “ideological cartel” of BlackRock, Vanguard and other major money managers....

    “Stakeholder capitalism is not politics. It is not a social or ideological agenda. It is not ‘woke’. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper.”

    It came after conservative groups criticised BlackRock, which manages more than $US10 trillion in assets, for its “woke posturing” to hide the funnelling of money to Chinese companies through its investment funds.....

    Other fund managers have expressed concerns corporate giants are focusing on political issues over returns......

    The Telegraph London
    #113     May 11, 2022
  4. themickey


    Opinion Farhad Manjoo
    What BlackRock, Vanguard and State Street Are Doing to the Economy May 12, 2022
    Credit...Illustration by The New York Times; Photographs by hudiemm, PM Images, and sstop via Getty

    When I got on the phone with Vivek Ramaswamy on Tuesday afternoon, I was not expecting to find common cause. Ramaswamy is a tech entrepreneur, a frequent contributor to conservative outlets such as The Wall Street Journal’s editorial page and the author of a book whose very title sounds as if it had been formulated in a lab at Fox News to maximally tickle the base and trigger the libs: “Woke, Inc.: Inside Corporate America’s Social Justice Scam.”

    I’d reached out to Ramaswamy to discuss his new venture, Strive Asset Management, an investment firm that he says will urge corporations to stay out of politics. Among Strive’s funders, though, is one of the more politically active people in business, Peter Thiel, the billionaire venture capitalist who supported Donald Trump and is now funding a slate of Trump-loving congressional candidates.

    It turned out I was right: I did not agree with a lot of what Ramaswamy had to say. Not only are our politics radically at odds, we also differ on what “politics” means in modern American capitalism. Yet despite our disagreements, something odd happened. I found myself nodding along with what is perhaps Ramaswamy’s fundamental point: that three gigantic American asset management firms — BlackRock, Vanguard and State Street — control too much of the global economy.

    The firms manage funds invested by large institutions like pension funds and university endowments as well as those for companies and, in some cases, individual investors like me and perhaps you, too. Their holdings are colossal. BlackRock manages nearly $10 trillion in investments. Vanguard has $8 trillion, and State Street has $4 trillion. Their combined $22 trillion in managed assets is the equivalent of more than half of the combined value of all shares for companies in the S&P 500 (about $38 trillion). Their power is expected to grow. An analysis published in the Boston University Law Review in 2019 estimated that the Big Three could control as much as 40 percent of shareholder votes in the S&P 500 within two decades.

    Why is this a problem? Ramaswamy argues that the main issue is that the firms are using their heft to push companies in which they hold large investments into adopting liberal political positions — things like focusing on climate change or improving the diversity of their work force. I think that’s a canard, as I’ll explain below.

    The real danger posed by the three is economic, not political. The American economy is lumbering under monopoly and oligopoly. In many industries, from airlines to internet advertising to health care to banks to mobile phone providers, Americans can do business with just a handful of companies. As the journalist David Dayen has argued, this increasing market concentration reduces consumer choice, raises prices and most likely harms workers.

    BlackRock, Vanguard and State Street have been extraordinarily good for investors — their passive-investing index funds have lowered costs and improved returns for millions of people. But their rise has come at the cost of intense concentration in corporate ownership, potentially supercharging the oligopolistic effects of already oligopolistic industries.

    John Coates, a professor at Harvard Law School, has written that the growth of indexation and the Big Three means that in the future, about a dozen people at investment firms will hold power over most American companies. What happens when so few people control so much? Researchers have argued that this level of concentration will reduce companies’ incentives to compete with one another. This makes a kind of intuitive sense: For example, because Vanguard is the largest shareholder in both Ford and General Motors, why would it benefit from competition between the two? If every company is owned by the same small number of people, why fight as fiercely on prices, innovations and investments?

    Indeed, there is some evidence that their concentrated ownership is associated with lower wages and employment and is already leading to price increases in some industries, including in airlines, pharmaceuticals and consumer goods. The firms dispute this. In a 2019 paper, Vanguard’s researchers said that when they studied lots of industries across a long period, they did not “find conclusive evidence” that common ownership led to higher profits.

    But if the Big Three keep growing, the effects of their concentrated ownership will get only worse. Einer Elhauge, also of Harvard Law School, has written that concentrated ownership “poses the greatest anticompetitive threat of our time, mainly because it is the one anticompetitive problem we are doing nothing about.”

    Ramaswamy says his new firm, Strive, will aim to limit the Big Three’s power through competition. If Strive attracts enough investors to gain a say in how companies are run — a huge “if,” considering that Ramaswamy has said that Strive has raised only about $20 million compared with the trillions managed by the Big Three — Ramaswamy says that he will push for companies to focus on “excellence” rather than wading into heated political issues.

    But the goal of staying out of politics in 2022 is about as realistic as staying dry in a hurricane. Last year, for example, BlackRock, Vanguard and State Street supported a successful effort to shake up the board of Exxon Mobil by installing new members who promised to take climate change more seriously. Was that because of excessive wokeness, as Ramaswamy says, or because Exxon Mobil had been underperforming its peers for several years, and it was woefully ill prepared for the transition to renewable energy that has been transforming energy markets? The move seems well within what the investment firms say is their main goal, looking out for the long-term interest of shareholders. And what if the firms hadn’t backed the climate initiative — wouldn’t that have been construed as a political decision by the activists who have called on shareholders to push corporations to address the climate? (In any case, BlackRock announced this week that it would most likely vote for fewer climate-related shareholder proposals in 2022 than it did in 2021.)

    In late 2018, a few months before his death, John C. Bogle, the visionary founder of Vanguard who developed the first index fund for individual investors, published an extraordinary article in The Wall Street Journal assessing the impact of his life’s work. The index fund had revolutionized Wall Street — but what happens, he wondered, “if it becomes too successful for its own good?”

    Bogle pointed out that asset management is a business of scale — the more money that BlackRock or Vanguard or State Street manages, the more it can lower its fees for investors. This makes it difficult for new companies to enter the business, meaning that the Big Three’s hold on the market seems likely to persist. “I do not believe that such concentration would serve the national interest,” Bogle wrote.

    Bogle outlined several ideas for limiting their power, but he pointed out problems with a number of them. For example, regulators could prohibit index funds from holding large positions in more than one company in a given industry. But how then would they offer an index fund that invested in all companies in the S&P 500, one of the most popular kinds of funds?

    Coates, of Harvard, argues that policymakers will have to move carefully to manage the dangers of concentration without limiting the benefits to investors of these firms’ low-cost funds. “No doubt getting the balance right will require judgment and experimentation,” he wrote.

    But the most pressing issue is for us to recognize the problem. The growing influence of three large fund managers is not likely to diminish. Ramaswamy’s take on the problem is wrong, but he’s right that it’s a problem. How much power do the three companies have to accumulate before we decide it’s too much?
    #114     May 14, 2022
  5. VicBee


    The US political system foundation is based on corporate influence over the political to ensure their interests are preserved. Certainly the same can be said of many other modern nations, but the US stands out because it is also culturally ingrained at least in conservative circles that government is best when insignificant and that such influence is a function and not a flaw of the system.

    Although not immune to self interested influence, corporations in European nations are under the firm grip of governments who are themselves subject to elections by populations that are generally wary of the influence of non elected financial powers. It's no surprise that Google, Microsoft, Amazon and other mega corporations are admonished in Euro courts while Americans complain about such influence but do little to curb it.

    I frankly don't know where to stand on that reality. America has demonstrated over many decades their ability to adjust and grow at costs unacceptable to Europeans while European nations control and grow in ways unacceptable to Americans.
    #115     May 14, 2022
  6. themickey


    BlackRock is breaking the wrong records with $US1.7 trillion loss
    Marc Rubinstein
    Jul 21, 2022 – 5.11am

    BlackRock is used to breaking records. The world’s largest asset manager was the first firm to break through $US10 trillion of assets under management. But the bigger they are, the harder they fall. And this year BlackRockchalked up another record: the largest amount of money lost by a single firm over a six-month period. In the first half of this year, it lost $US1.7 trillion of clients’ money.

    BlackRock management was quick to invokethe first-half market carnagewhen revealing the investment performance last week. “2022 ranks as the worst start in 50 years for both stocks and bonds,” chairman and chief executive officer Larry Fink said on his earnings call.

    While few firms are able to avoid what the market throws at them, some at least try to overcome it. BlackRock is increasingly giving up: At the end of June, only about a quarter of its assets were actively managed to beat a benchmark - rather than track it seamlessly as passive strategies are designed to do. That’s down from a third when BlackRock acquired Barclays Global Investors in 2009 to become the leading player in exchange-traded funds.

    Within the equities business, the divergence is especially pronounced. Across the industry, assets have leached away from active strategies and into passive. In BlackRock’s case, around $US21 billion has flowed out of active equity in the past decade, with $US730 billion flowing into indexed equity. The firm’s passive equity holdings are now 10 times larger than its active business, although it does operate some active multi-asset and alternatives strategies that narrow the gap.

    For portfolio managers on the fixed-income side, the evolution of the business portends an ominous future.......
    #116     Jul 20, 2022
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  7. easymon1


    Damn, that's gonna leave a mark if we don't bail them out!
    #117     Jul 20, 2022
  8. %%
    Exactly\ chicoms are control freaks\
    US has tried that but US founding fathers intentionally set up many many checks + balances. Then you have some in the US ;like the WSJ noted , many sheriffs announced /not going to enforce any goofy gun laws...................................................................................State of MO passed a law , arrest any fed that interferes with 2nd ammendment:caution::caution:
    #118     Jul 21, 2022
  9. easymon1


    Are these respected today?
    #119     Jul 21, 2022
    murray t turtle likes this.
  10. %%
    7-July] Depends/even the WSJ noted the sheriffs announced they respect the constitution, rule of law+ not liberal loon laws.
    666]I remember reading news on Romania\ that dictator had no respect for any law; + made so many restrictions on gasoline\he ran out of gas\LOL. Strangely ;then the military executed him. So payday some day.
    7 -July again]. THAT Indy mall shooter had no respect for ANY law, killed 3.
    Turns out Elisha, whom the police chief named a good Samaritan, was good shot; 40 yards with a pistol[Glock] + the lawless was a dead duck.
    So true, some dont even respect what chair Mao said ''political power comes out of a gun barrel''= dead ducks so to speak..................................................................
    #120     Jul 21, 2022