BlackRock CEO Larry Fink ($10Trillion AUM) Has Unchecked Influence In Financial Markets And Needs To Be Reined In
“When passive index providers become activists, you’re heading in the wrong direction.” Joker. BlackRock CEO Larry Fink ($10Trillion AUM) Has Unchecked Influence In Financial Markets And Needs To Be Reined In
Asset managers, including BlackRock, Vanguard and Fidelity, mostly invest their customers’ money in broad baskets of stocks that track an index like the S&P 500. Index funds make sense for most retail investors who lack the time and information to actively trade stocks.
Rather than push companies to pursue higher returns, they’re trying to impose their political agenda on corporate America.
CEOs and corporate boards can find themselves on the wrong end of a shareholder vote if they refuse to accommodate BlackRock’s policy preferences on climate and “stakeholder capitalism.”Hail, Caesar, er, Larry.
When you’re 98 years old you can say things others can’t, so bravo to Charlie Munger for daring to speak an important but too muffled truth about today’s financial markets. “We have a new bunch of emperors, and they’re the people who vote the shares in the index funds,” Warren Buffett’s Berkshire Hathaway partner said Wednesday. “I think the world of Larry Fink, but I’m not sure I want him to be my emperor.” Many CEOs no doubt privately agree.
As Americans have poured savings into exchange-traded and mutual funds, index providers have become the de facto largest shareholders of public companies. Assets under management by Mr. Fink’s company, BlackRock, have doubled to $10 trillion since 2016.
Two years ago Mr. Fink wrote a letter to CEOs threatening to vote against corporate managers if they didn’t follow environmental, social and governance (ESG) disclosures prescribed by the Sustainability Accounting Standards Board.
That Michael Bloomberg -backed outfit wants companies to report minutia from how much plastic they use to sales from sugary beverages.
In his annual letter this year, Mr. Fink did have some nice words about capitalism, which has been very, very good to him. But he also lectured CEOs that “employees are increasingly looking to their employer as the most trusted, competent, and ethical source of information,” and “stakeholders” including employees, customers, communities, and regulators “need to know where we stand on the societal issues intrinsic to our companies’ long-term success.”
Mr. Fink will also tell you what stand to take on those issues. He and his allies have become major swing votes in proxy board battles and shareholder resolutions. Climate-focused activist fund Engine No. 1 held only 0.02% of ExxonMobil shares, but it nonetheless managed to oust three board members last summer with the support of the Emperors’ club.
“Many savvy governance observers were paying close attention to how Exxon’s top three investors—Vanguard, BlackRock, and State Street, in that order—voted,” a Harvard Law School Forum on Corporate Governance article noted. “The Big Three, which own roughly twenty percent of the S&P 500’s outstanding shares, had made significant climate commitments over the past several years.”
Berkshire Hathaway makes selective investments in companies, and with great success over decades. So Mr. Munger may have a philosophical investing difference with index funds. But that doesn’t mean he’s wrong about BlackRock’s market power, which Mr. Fink is using for political purposes. We hope Mr. Munger’s comments trigger a larger debate about the Emperor and his commands.
BlackRock SEC Filings Show Company Gained $369K From Bitcoin Futures
Larry Fink, chief executive officer of BlackRock, said in July that the company was seeing “very little in terms of investor demand” for cryptocurrencies.
A filing from the United States Securities and Exchange Commission, or SEC, shows that BlackRock Financial Management has increased the number of its Bitcoin futures contracts since Q1 2021.
According to a Tuesday filing with the SEC, the BlackRock Global Allocation Fund included 54 Bitcoin (BTC) futures contracts issued through the Chicago Mercantile Exchange as of July 31. The contracts, which expired on Aug. 27, were worth $10.8 million, appreciating by $369,137.
The gains from the Bitcoin futures represent roughly 0.00138% of the BlackRock Global Allocation Fund, or 8.91 BTC at the time of publication. The company holds $9.5 trillion in total assets under management.
The investment comes following BlackRock chief intelligence officer Rick Rieder saying earlier this year that the firm had “started to dabble a bit” in crypto. However, CEO Larry Fink said in July that the company was seeing “very little in terms of investor demand” for cryptocurrencies.
Before pursuing Bitcoin futures, BlackRock had indirect exposure to the crypto asset through its ownership stake in business intelligence firm MicroStrategy The investment company also mentioned Bitcoin in two prospectus filings with the SEC in January, hinting that it would be exploring using crypto derivatives.
News of the BlackRock SEC filing comes as the price of Bitcoin has dropped more than 4% in the last 24 hours following a month of considerable volatility. As data from Cointelegraph Markets Pro shows, the price of the crypto asset is $41,323 at the time of publication.
BlackRock’s Hildebrand Would Take Cash Over Gold or Bitcoin
* Hildebrand Sees Inflation Running At Around 3% For ‘Some Time’ * Former SNB Chief Sees No Fed Hike Until 2023 At The Earliest
For BlackRock Inc. Vice Chairman Philipp Hildebrand, gold and Bitcoin just can’t beat good old-fashioned cash.
When asked on a virtual London Bullion Market Association panel whether he’d rather be given $10,000 in cash, bullion or Bitcoin, the former Swiss National Bank governor opted for the greenback. He didn’t explain his reasoning.
Gold prices are down about 15% from last year’s record high on prospects for tighter monetary policy. Last week, BlackRock fund manager Russ Koesterich told Bloomberg TV he’s sold almost all of his gold holdings on expectations that real rates will normalize as the global economy rebounds.
Much of the outlook for gold depends on how consumer prices fare and the Federal Reserve’s timeline for curbing stimulus.
Inflation could settle around 3% or a bit higher for “some time” after the current spike caused by snarled supply chains abates, Hildebrand told the panel, citing central banks tolerating price overshoots.
“We aren’t going to have 5%, 6%, 7% inflation, but I am convinced that inflation will trend higher,” he said. “We are in a higher inflation regime than we have been in for the last decade.”
The world’s push to tackle climate change will contribute to higher inflation due to the costs of green production, he added.
Still, he doesn’t expect the Fed to raise rates until 2023 at the earliest, with the European Central Bank tightening policy after that.
Bitcoin is trading at about $43,470, roughly 25 times the cost of an ounce of gold.
BlackRock Chairman ‘More In The Jamie Dimon Camp’ On Bitcoin, Praises Crypto
In fresh, albeit mixed, comments on Bitcoin, Larry Fink reiterated excitement about the future of cryptocurrency — and does not dismiss the idea that the success story could be BTC.
The chairman of multi-billion-dollar United Stated investment management corporation BlackRock “probably” agrees that Bitcoin (BTC) has no value.
In an interview with CNBC on Oct. 13, Larry Fink issued a tentative agreement with JPMorgan CEO Jamie Dimon on Bitcoin’s true worth.
Fink: “I Can’t Tell” If Bitcoin Is Going To $80,000 Or Zero
Famed for his allusions to Bitcoin over the years, Fink, who maintains that he is not a fan of the largest cryptocurrency, nonetheless supports more people investing in the space.
“I’m not a student of Bitcoin and where it’s going to go, so I can’t tell you whether it’s going to $80,000 or zero,” he told the network.
“But I do believe that there is a huge role for a digitized currency, and I believe that’s going to help consumers worldwide — whether it’s a Bitcoin or something else, or more of a governmental official digital currency, a digital dollar, that will play out.”
Fink was speaking just after Dimon had reiterated his skepticism on Bitcoin, drawing attention to his lack of faith in its finite supply.
Proponents immediately hit back at his comments, suggesting that only a lack of understanding could lead one to question what is written — and subsequently enshrined by over 12 years of immutable consensus — in the code.
“I have more conversations with people in the street on crypto than anything,” Fink continued.
“It’s fantastic seeing how people have become so fascinated about it, that they’re showing interest in this, whether it’s going to play out in the long run. We’ll see. As I said, I see huge opportunities in a digitized crypto/ blockchain-related currency, and that’s where I think it’s going — and that’s going to create some big winners and some big losers.”
Bitcoin is up almost 600% since the 2020 block subsidy halving event and has outperformed macro assets throughout 2021.
Bitcoin Lies In Wait To Surprise Critics
Bitcoin traded down from five-month highs Wednesday in what analysts believe should be the final retracement before a retest of all-time highs of $64,500.
Going forward, predictions remain firmly bullish, with calls of not only six figures but up to $300,000 in the coming months.
As Cointelegraph reported, data shows that 2021 is increasingly repeating 2017’s bull run characteristics, with only the blow-off top phase left to complete.
* Previously Sleepy Fund Sees Huge Amounts Pour In And Out * IShares MSCI Kokusai Tracks Index Of Stocks, Excluding Japan
In just a matter of weeks, $3.7 billion suddenly entered and then exited a BlackRock Inc. exchange-traded fund that barely had any day-to-day action over its 15 year life-span,leaving traders scratching their heads for clues as to what’s behind the move.
On Jan. 25, after months of recording zero inflows, the iShares MSCI Kokusai exchange-traded fund (ticker TOK) brought in $3.7 billion, according to data compiled by Bloomberg. The ETF then continued trading like normal — with mostly zero flows — until the billions swiftly exited the fund over two separate trading days in February.
Billions of dollars in flows is rare for a fund that had less than $200 million in total assets at the beginning of the year and has until now mostly failed to generate investor interest in its strategy to buy large and mid-cap companies around the globe, excluding Japan.
“I’m genuinely perplexed,” said James Seyffart, ETF analyst at Bloomberg Intelligence.
A spokesperson for BlackRock declined to comment on the fund activity.
The sudden influx of cash could indicate a large asset manager is tweaking a model portfolio allocation, a strategy that has been suspected in a series of other mega flows. But to Seyffart, a model trade wouldn’t take three weeks to get in and out of a fund.
The three week lag between the inflow and outflow also mostly negates guesses that the flow is a tax optimization re-balancing trade, known as a “heartbeat,” said Seyffart.
And to Cinthia Murphy, director of research at the ETF Think Tank, heartbeats don’t usually exceed the net asset value of the fund.
“We can only speculate that they are either washing assets in something else, like an SMA or an offshore product, or it’s a trade for a big institutional investor looking for exposure for a day, or maybe an options-related trade, something like that. It’s hard to tell, but it’s likely not a heartbeat for TOK,” Murphy said.
TOK has returned about 165% since inception, according to data compiled by Bloomberg, compared with 148% for the MSCI All-Country World Index.