BlackRock Inc. (‘BlackRock’) has been called the World's largest Shadow Bank, due to its power, coupled with the sheer size & scope of its financial assets & activities. However, despite its large size, BlackRock has managed to stay somewhat under the radar.
Recently, BlackRock has come into public interest over buying up property and populating the Biden's administration economics department. In this section we will try and shed some light on BlackRock and its history, values and past dealings.
BLACKROCK OVERVIEW
BlackRock is an American global investment management corporation. It was founded in 1988 and is based in New York City.
BlackRock was initially a risk management & fixed income institutional asset manager, and now is the world's largest asset managers with with US$8.67 trillion in assets under management as of January 2021. BlackRock operates globally with 70 offices in 30 countries and clients in 100 countries.
BLACKROCK'S RECENT ACTION
In BlackRock's CEO & Founder - Laurence Fink's - 2020 annual open letter, he announced environmental sustainability as core goal for BlackRock's future investment decisions.
Accordingly, BlackRock disclosed plans to sell US$500 million in coal investments However, the history of BlackRock's actions have showed little sincere environmental care , and the timing to do this with US' economy stalling seems detrimental to the nation.
Moreover, China emits more greenhouse gas than the entire developed world combined, a new report has claimed, with the research by Rhodium Group saying that China emitted 27% of the world's greenhouse gases in 2019.
Destroying ones own economy and making a nation energy dependent seems suspect, especially given BlackRock's past dealings and closes ties to the Chinese Communist Party ('CCP'). In fact, in August 2020, BlackRock received approval from the China Securities Regulatory Commission to set up a mutual fund business in the country. This makes BlackRock the first global asset manager to get consent from China to start operations.
BLACKROCK TIES TO THE DEMOCRAT PARTY
BlackRock the world’s largest shadow bank is run and was founded by a KBΦ member – Larry Fink. BlackRock entities have populated Biden’s administration. They also have strong ties to the Clinton’s, Sen. Elizabeth Warren suggesting, on 4 March 2021, that Blackrock should be considered "too big to fail". Click here for our article on BlackRock ties to the Democrat party.
GLOBAL FINANCIAL CRISIS
In 1988, Robert S. Kapito left First Boston along with Laurence D. Fink and founded BlackRock under the umbrella of the private equity firm Blackstone Group where they joined as partners.
In 1992, BlackRock was spun out from Blackstone and became an independent company. Through BlackRock Solutions, the Firm provides risk management and enterprise investment services for approximately US$9 trillion of assets.
Laurence D. Fink met Robert Kapito, at First Boston where they were instrumental in pioneering the mortgage-backed security market in the United States. This would be a lead cause in the oncoming Global Financial Crisis (‘GFC’). The securitization of subprime mortgages into mortgage-backed securities and collateralized debt obligations was a major contributing factor in the subprime mortgage crisis.
In spite of BlackRock's bad track record, in March 2020, the Federal Reserve chose BlackRock to manage:
Two corporate bond-buying programs in response to the coronavirus pandemic:
The US$500 billion Primary Market Corporate Credit Facility; and
The Secondary Market Corporate Credit Facility,
As well as purchase by the Federal Reserve System of commercial mortgage-backed securities guaranteed by Government National Mortgage Association, Federal National Mortgage Association, or Federal Home Loan Mortgage Corporation.
In fact, BlackRock was scrutinized for allegedly taking advantage of its close ties with the Federal Reserve System during the coronavirus pandemic response efforts.
In 2020, US Representatives Katie Porter and Jesús García proposed a bill to Congress aiming to restrain BlackRock and other so-called shadow banks.
BLACKROCK & SECRET SOCIETIES
BlackRock was founded and is run by a Kappa Beta Phi ('KBΦ') member – Larry Fink. Kappa Beta Phi like its associated Phi Beta Kappa ('ΦBK') was started at the College of William & Mary. Ben Bernanke, like Bill Clinton was a Phi Beta Kappa member. and was also instrumental in the plan to “save” the economy as head of the Federal Reserve. We examine BlackRock and Kappa Beta Phi's role in the GFC here.
Fink instrumental in starting the system that led to the crisis was not the only Kappa Beta Phi member involved either. Note the following individuals who were involved in the GFC were all KBΦ Members.
Laurence D. Fink – CEO of BlackRock
James Cayne– former CEO of Bear Stearns
Alan Schwartz – former president of Bear Stearns
Richard S. Fuld Jr. – former chair and CEO of Lehman Brothers.
We discuss secret societies more in the following posts:
Kappa Beta Phi Story
In 2012 Kevin Roose crashed the party of KBΦ. He wrote an article ‘One-Percent Jokes and Plutocrats in Drag: What I Saw When I Crashed a Wall Street Secret Society’ about his experience. Including:
Speeches about the founding of the group
Drag dressing
Singing the parody Book of Mormon
According to Roose’s recount, Wilbur Ross’ opening speech mentions the story of the founding of Kappa Beta Phi. Apparently the fraternity was founded in 1929, by ‘four C+ students at William and Mary.
‘The Wall Street contingent was founded in 1929, just before the stock market crash, later taking on the aim of keeping alive the spirit of those good old pre-depression days, when fat cats grew ever fatter, seemingly immune to whatever economic struggles dominated the lives of the unfortunate masses. By all appearances, Kappa Beta Phi has been a smashing success.’
‘An odd wrinkle here, then, is that those elites who most champion the notion of American meritocracy, who insist that whoever works hardest and produces the most value in our society reaps its greatest rewards, all belong to a club whose founding ethos was disdain for fey over-achievers, in favour of macho hedonism.’
Obviously these values are not what you want in people running your economy.
OTHER EXAMPLES
Before concluding this brief snapshot of BlackRock see the following slide show below that covers a snap shot of the following topics:
BlackRock & War
BlackRock & Global Warming
BlackRock Ownership & Transparency
BlackRock & Corruption
Blackrock Case Study: Anti-Elon Musk Agenda
BlackRock & War
In the 2018 BlackRock Annual Letter to Shareholders, BlackRock’s CEO, Laurence D. Fink, stated that other CEOs should be aware of their impact on society.
However, Anti-war organizations were discontent with Fink’s statement, pointing out Fink's hypocrisy. Indeed, BlackRock is the largest investor in weapon manufacturers through its iShares U.S. Aerospace & Defense ETF.
In May 2018, anti-war organizations held a demonstration outside the annual BlackRock shareholder’s meeting in Manhattan, New York.
BlackRock & Global Warming
BlackRock's attempts to model itself as a sustainable investor seem for appearance only.
Example 1: As of December 2018, BlackRock was the world’s largest investor in coal plant developers, holding shares worth US$11 billion among 56 coal plant developers.
Example 2: For 2018, BlackRock owned more oil, gas, & thermal coal reserves than any other investor with total reserves amounting to 30% of total energy-related emissions from 2017 (9.5 gigatonnes of CO2 emissions).
Example 3: Concerned about global warming, environmental groups including the Sierra Club, and Amazon Watch launched a campaign called BlackRock's Big Problem in September 2018.
In this campaign, these groups assert that BlackRock is the "biggest driver of climate destruction on the planet", due in part to its refusal to divest from fossil fuel companies.
Example 4: 23 September 2019, BlackRock was under fire for backing Brazil’s JBS, with Global Witness criticising fund groups for investing in company accused of aiding deforestation.
As mentioned, on 14 January 2020, BlackRock CEO declared that environmental sustainability would be a key goal for investment decisions. BlackRock announced that it would sell $500 million worth of coal-related assets. However, at the same time BlackRock's desire for transparency has decreased. In fact, BlackRock's support for shareholder resolutions requesting climate risk disclosure fell from 25% in 2019 to 14% in 2020 according to Morningstar Proxy Data.
BlackRock Ownership & Transparency
BlackRock's chain of ownership is similar to circular ownership structures which have been identified in the United Kingdom, where BlackRock is a shareholder in many institutional investors that own shares in BlackRock.
BlackRock & Corruption
Example 1:
On July 2014, it was reported that BlackRock was fined for market manipulation over UniCredit stake.
Example 2:
On 8 November 2018, it was reported that German police were raiding BlackRock offices over corruption.
Example 3:
In May 2020, The European Ombudsman opened an inquiry to inspect the Commission's file on the European Commission's decision to award a contract to BlackRock Investment Management to carry out a study on integrating environmental, social and governance risks and objectives into EU banking rules ('the prudential framework').
Blackrock Case Study: Anti-Elon Musk Agenda
On 5 October 2018, Elon Musk, in a series of Twitter posts, alleged that:
BlackRock and other financial firms pocket ‘excessive profit’ from lending shares they hold to short sellers because ‘they’re suffering a net loss.’
The funds were ‘pretending to charge low rates’ for their passive “index tracking” products.
Musk hit out at that practice, saying ‘there is no rational basis’ for long-term shareholders to engage in that business. He claimed that doing so ‘dilutes the shareholder base’ while giving short sellers ‘a strong incentive to attack the company by whatever means possible.’
Indeed, BlackRock helped drive the short squeeze, where short sellers profit by hurting Tesla’s price, and then Blackrock would buy more Tesla shares at lower prices they helped drive down. In addition, on 31 August 2018 BlackRock used their Tesla stake to vote to replace Tesla's Musk with an independent chairman.
CONCLUSION
For such a powerful company BlackRock doesn't seem to have a history of good ethics. More over their close connection to governments in control may mean they avoid the requisite scrutiny necessary to ensure they act in the public's interests.
FURTHER READING
BLACKROCK'S REAL AGENDA?
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