BlackRock is basically a custodian of financial assets, and it does not make sense to credit or blame the custodian for trillions of dollars of gains or losses due to movements in the financial markets.
Blackrock has a lot more influence over the companies they hold. They threaten to dump stock of companies if those companies won't adhere to their ESG scores, which will crash the companies. They threaten not to be buyers of companies if they don't adhere to their will. Market fundamentals don't matter.
- Blackrock buying up single family homes at a record clip (timestamped), this short video on Blackrock's "Aladdin" AI: https://youtu.be/AWBRldjVzuM?t=363
All the criticisms seem basically true, they just don't make any sense.
Since their job is mostly to own all of the companies out there, they own most of the evil companies, and therefore they must logically be "The Most Evil Business In The World". Doesn't take an ounce of investigative journalism.
But as long as their job is mostly to own all the companies, they can't do much dumping of stock, for ESG or other reasons.
And when your job is mostly to own all the companies, then sure, market fundamentals don't matter by definition.
> Maybe I'm misunderstanding something here, but once the shares are on the market, what impact does selling them have on the companies?
It affects the company's market cap, the wealth of the company's shareholders, & the employees/executives with stock options as part of their compensation plans. A significant drop will share price may even trigger the other shareholders to vote on changing the management in charge of defying the ESG mandate.
Do you have a non-conspiracy person Youtube source?
The whole ESG thing is a weird Kabuki theater thing to hang your argument on. Blackrock had almost no power to enforce ESG, and companies almost have no reason to comply. The fact that do many choose to do so is pretty voluntary.
Blackrock funds have mandates. If the mandate says ESG score must be >10 then that fund must hold ESG >10 stocks.
Nobody is holding a gun to investors heads, forcing them to allocate money into funds that have this mandate that then only buy stocks that fulfil this mandate.
> Is a huge financial institution threatening to sell not a 'reason' and a form of power?
Investors threaten to sell stock all the time. Sales are shit - im gonna sell my stock unless you fire some people. Not paying a dividend - im gonna sell my stock unless you pay one. Stock price is performing poorly - im gonna sell my stock unless you do a stock split to con people into thinking the stock is cheaper.
When has Blackrock tanked a stock and where are the ESG changes? Ultimately the are fiduciary as an asset manager for their clients they can't decide to tank stocks for fun. A huge part of the holdings are in ETF which they can threaten to sell. Any deviation from typical huge fund manager behaviour when it come to governance is big finance news they hardly ever go against the grain. The biggest reason tho is that no one in Finance really gives a hoot about ESG, only returns
>Any deviation from typical huge fund manager behaviour
You make it sound extremely subjective, but Blackrock is (I think) mostly managing index funds, and it should be easy to quantify how well they track an index.
I'm talking about corporate governance stuff like AGM and voting. They own a so much of companies because of index funds, but when they do make noise it makes the headlines of finance news.
>Blackrock had almost no power to enforce ESG, and companies almost have no reason to comply.
When Blackrock is the largest, or one of the largest shareholders in many companies - YES, they have enormous power in the decision making of those companies.
Blackrock is shareholding on behalf of individual investors. The amount of decision they can wield is pretty constrained. If I hire you to do my shopping, you can't just cross items off the list because you want to power trip on the butcher.
Furthermore, even if I buy into the hypothetical that Blackrock would dump a company from its portfolio over ESG, how much would it actually drop the price of the stock if the fundamentals are the same? Is the problem that there are not enough greedy investors on Wall Street?
If you buy shares in a Blackrock S&P 500 fund, which is the sort of fund that accounts for their huge holdings of most public companies, then I don't think they have the power to dump stocks that are on the official list.
That would be weird. I mean, at least it would be much more newsworthy than this article, and I would expect to have heard. And I would expect massive lawsuits and regulators out for blood.
This is correct. They are essentially a competitor of Vanguard. It's amazing how many people think they're some kind of hedge fund or prop shop making directional bets and gambles.
Genuine question; If they're competitors, why is Vanguard Blackrock's biggest shareholder?[0] Is this the norm? Or is there a link between the two?
(I don't know anything about the stock market)
Check out Euroclear.com. They exclusively handle all back end clearing and settlement on the Paris, Brussels, and Amsterdam Bourses, as well as the London Stock Exchange. They may now handle some other stock exchanges, too. They also handle the majority of backend clearing and settlement across Europe.
As of the last time I checked (several years ago), they had over 27T Euros of assets under management.
Their competitor in the US is Depositary Trust Corporation (DTC), and last I checked they had over one quadrillion dollars of assets under management.
