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Submerged BlackRock Criminals Shipwrecking Humanity?

 
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TonyGosling
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PostPosted: Sat Oct 03, 2020 11:55 am    Post subject: Submerged BlackRock Criminals Shipwrecking Humanity? Reply with quote

Meet BlackRock, the New Great Vampire Squid
Posted on June 22, 2020 by Ellen Brown#
https://ellenbrown.com/2020/06/22/meet-blackrock-the-new-great-vampire -squid/

BlackRock is a global financial giant with customers in 100 countries and its tentacles in major asset classes all over the world; and it now manages the spigots to trillions of bailout dollars from the Federal Reserve. The fate of a large portion of the country’s corporations has been put in the hands of a megalithic private entity with the private capitalist mandate to make as much money as possible for its owners and investors; and that is what it has proceeded to do.

To most people, if they are familiar with it at all, BlackRock is an asset manager that helps pension funds and retirees manage their savings through “passive” investments that track the stock market. But working behind the scenes, it is much more than that. BlackRock has been called “the most powerful institution in the financial system,” “the most powerful company in the world” and the “secret power.” It is the world’s largest asset manager and “shadow bank,” larger than the world’s largest bank (which is in China), with over $7 trillion in assets under direct management and another $20 trillion managed through its Aladdin risk-monitoring software. BlackRock has also been called “the fourth branch of government” and “almost a shadow government”, but no part of it actually belongs to the government. Despite its size and global power, BlackRock is not even regulated as a “Systemically Important Financial Institution” under the Dodd-Frank Act, thanks to pressure from its CEO Larry Fink, who has long had “cozy” relationships with government officials.

BlackRock’s strategic importance and political weight were evident when four BlackRock executives, led by former Swiss National Bank head Philipp Hildebrand, presented a proposal at the annual meeting of central bankers in Jackson Hole, Wyoming, in August 2019 for an economic reset that was actually put into effect in March 2020. Acknowledging that central bankers were running out of ammunition for controlling the money supply and the economy, the BlackRock group argued that it was time for the central bank to abandon its long-vaunted independence and join monetary policy (the usual province of the central bank) with fiscal policy (the usual province of the legislature). They proposed that the central bank maintain a “Standing Emergency Fiscal Facility” that would be activated when interest rate manipulation was no longer working to avoid deflation. The Facility would be deployed by an “independent expert” appointed by the central bank.

The COVID-19 crisis presented the perfect opportunity to execute this proposal in the US, with BlackRock itself appointed to administer it. In March 2020, it was awarded a no-bid contract under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to deploy a $454 billion slush fund established by the Treasury in partnership with the Federal Reserve. This fund in turn could be leveraged to provide over $4 trillion in Federal Reserve credit. While the public was distracted with protests, riots and lockdowns, BlackRock suddenly emerged from the shadows to become the “fourth branch of government,” managing the controls to the central bank’s print-on-demand fiat money. How did that happen and what are the implications?

Rising from the Shadows

BlackRock was founded in 1988 in partnership with the Blackstone Group, a multinational private equity management firm that would become notorious after the 2008-09 banking crisis for snatching up foreclosed homes at firesale prices and renting them at inflated prices. BlackRock first grew its balance sheet in the 1990s and 2000s by promoting the mortgage-backed securities (MBS) that brought down the economy in 2008. Knowing the MBS business from the inside, it was then put in charge of the Federal Reserve’s “Maiden Lane” facilities. Called “special purpose vehicles,” these were used to buy “toxic” assets (largely unmarketable MBS) from Bear Stearns and American Insurance Group (AIG), something the Fed was not legally allowed to do itself.

BlackRock really made its fortunes, however, in “exchange traded funds” (ETFs). It gained trillions in investable assets after it acquired the iShares series of ETFs in a takeover of Barclays Global Investors in 2009. By 2020, the wildly successful iShares series included over 800 funds and $1.9 trillion in assets under management.

Exchange traded funds are bought and sold like shares but operate as index-tracking funds, passively following specific indices such as the S&P 500, the benchmark index of America’s largest corporations and the index in which most people invest. Today the fast-growing ETF sector controls nearly half of all investments in US stocks, and it is highly concentrated. The sector is dominated by just three giant American asset managers – BlackRock, Vanguard and State Street, the “Big Three” – with BlackRock the clear global leader. By 2017, the Big Three together had become the largest shareholder in almost 90% of S&P 500 firms, including Apple, Microsoft, ExxonMobil, General Electric and Coca-Cola. BlackRock also owns major interests in nearly every mega-bank and in major media.

In March 2020, based on its expertise with the Maiden Lane facilities and its sophisticated Aladdin risk-monitoring software, BlackRock got the job of dispensing Federal Reserve funds through eleven “special purpose vehicles” authorized under the CARES Act. Like the Maiden Lane facilities, these vehicles were designed to allow the Fed, which is legally limited to purchasing safe federally-guaranteed assets, to finance the purchase of riskier assets in the market.

Blackrock Bails Itself Out

The national lockdown left states, cities and local businesses in desperate need of federal government aid. But according to David Dayen in The American Prospect, as of May 30 (the Fed’s last monthly report), the only purchases made under the Fed’s new BlackRock-administered SPVs were ETFs, mainly owned by BlackRock itself. Between May 14 and May 20, about $1.58 billion in ETFs were bought through the Secondary Market Corporate Credit Facility (SMCCF), of which $746 million or about 47% came from BlackRock ETFs. The Fed continued to buy more ETFs after May 20, and investors piled in behind, resulting in huge inflows into BlackRock’s corporate bond ETFs.

In fact, these ETFs needed a bailout; and BlackRock used its very favorable position with the government to get one. The complicated mechanisms and risks underlying ETFs are explained in an April 3 article by business law professor Ryan Clements, who begins his post:

Exchange-Traded Funds (ETFs) are at the heart of the COVID-19 financial crisis. Over forty percent of the trading volume during the mid-March selloff was in ETFs ….

The ETFs were trading well below the value of their underlying bonds, which were dropping like a rock. Some ETFs were failing altogether. The problem was something critics had long warned of: while ETFs are very liquid, trading on demand like stocks, the assets that make up their portfolios are not. When the market drops and investors flee, the ETFs can have trouble coming up with the funds to settle up without trading at a deep discount; and that is what was happening in March.

According to a May 3 article in The National, “The sector was ultimately saved by the US Federal Reserve’s pledge on March 23 to buy investment-grade credit and certain ETFs. This provided the liquidity needed to rescue bonds that had been floundering in a market with no buyers.”

Prof. Clements states that if the Fed had not stepped in, “a ‘doom loop’ could have materialized where continued selling pressure in the ETF market exacerbated a fire-sale in the underlying [bonds], and again vice-versa, in a procyclical pile-on with devastating consequences.” He observes:

There’s an unsettling form of market alchemy that takes place when illiquid, over-the-counter bonds are transformed into instantly liquid ETFs. ETF “liquidity transformation” is now being supported by the government, just like liquidity transformation in mortgage backed securities and shadow banking was supported in 2008.

Working for Whom?

BlackRock got a bailout with no debate in Congress, no “penalty” interest rate of the sort imposed on states and cities borrowing in the Fed’s Municipal Liquidity Facility, no complicated paperwork or waiting in line for scarce Small Business Administration loans, no strings attached. It just quietly bailed itself out.

It might be argued that this bailout was good and necessary, since the market was saved from a disastrous “doom loop,” and so were the pension funds and the savings of millions of investors. Although BlackRock has a controlling interest in all the major corporations in the S&P 500, it professes not to “own” the funds. It just acts as a kind of “custodian” for its investors — or so it claims. But BlackRock and the other Big 3 ETFs vote the corporations’ shares; so from the point of view of management, they are the owners. And as observed in a 2017 article from the University of Amsterdam titled “These Three Firms Own Corporate America,” they vote 90% of the time in favor of management. That means they tend to vote against shareholder initiatives, against labor, and against the public interest. BlackRock is not actually working for us, although we the American people have now become its largest client base.

In a 2018 review titled “Blackrock – The Company That Owns the World”, a multinational research group called Investigate Europe concluded that BlackRock “undermines competition through owning shares in competing companies, blurs boundaries between private capital and government affairs by working closely with regulators, and advocates for privatization of pension schemes in order to channel savings capital into its own funds.”

Daniela Gabor, Professor of Macroeconomics at the University of Western England in Bristol, concluded after following a number of regulatory debates in Brussels that it was no longer the banks that wielded the financial power; it was the asset managers. She said:

We are often told that a manager is there to invest our money for our old age. But it’s much more than that. In my opinion, BlackRock reflects the renunciation of the welfare state. Its rise in power goes hand-in-hand with ongoing structural changes; in finance, but also in the nature of the social contract that unites the citizen and the state.

That these structural changes are planned and deliberate is evident in BlackRock’s August 2019 white paper laying out an economic reset that has now been implemented with BlackRock at the helm.

Public policy is made today in ways that favor the stock market, which is considered the barometer of the economy, although it has little to do with the strength of the real, productive economy. Giant pension and other investment funds largely control the stock market, and the asset managers control the funds. That effectively puts BlackRock, the largest and most influential asset manager, in the driver’s seat in controlling the economy.

As Peter Ewart notes in a May 14 article on BlackRock titled “Foxes in the Henhouse,” today the economic system “is not classical capitalism but rather state monopoly capitalism, where giant enterprises are regularly backstopped with public funds and the boundaries between the state and the financial oligarchy are virtually non-existent.”

If the corporate oligarchs are too big and strategically important to be broken up under the antitrust laws, rather than bailing them out they should be nationalized and put directly into the service of the public. At the very least, BlackRock should be regulated as a too-big-to-fail Systemically Important Financial Institution. Better yet would be to regulate it as a public utility. No private, unelected entity should have the power over the economy that BlackRock has, without a legally enforceable fiduciary duty to wield it in the public interest.

_________________________

Ellen Brown is an attorney, chair of the Public Banking Institute, and author of thirteen books including Web of Debt, The Public Bank Solution, and Banking on the People: Democratizing Money in the Digital Age. She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com.



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Meet BlackRock, the New Great Vampire Squid – neritam, on August 13, 2020 at 1:35 am said:
[…] source ellenbrown.com | Jun 22, […]

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Lockdowns, Coronavirus, and Banks: Following the Money – The New Dark Age, on August 15, 2020 at 7:26 am said:
[…] purchase “safe federally-guaranteed assets.” As a private company, BlackRock apparently faces no such restrictions. It can purchase more risky assets not backstopped by federal […]

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Professor Anthony Hall Pens His Most Important Article To Date. – THE ONENESS of HUMANITY, on August 15, 2020 at 6:25 pm said:
[…] purchase “safe federally-guaranteed assets.” As a private company, BlackRock apparently faces no such restrictions. It can purchase more risky assets not backstopped by federal […]

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Lockdowns, Coronavirus, and Banks: Following the Money | conspiracyoz, on August 15, 2020 at 11:25 pm said:
[…] purchase “safe federally-guaranteed assets.” As a private company, BlackRock apparently faces no such restrictions. It can purchase more risky assets not backstopped by federal […]

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Lockdowns, Coronavirus, and Banks: Following the Money – The Mad Truther, on August 19, 2020 at 6:32 am said:
[…] purchase “safe federally-guaranteed assets.” As a private company, BlackRock apparently faces no such restrictions. It can purchase more risky assets not backstopped by federal […]

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Lockdowns, Coronavirus, and Banks: Following the Money - The E-Patient Health Care Library The E-Patient Health Care Library, on August 19, 2020 at 7:07 am said:
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A Fierce-looking King Will Stand Up | The Watchman's Post, on August 28, 2020 at 9:45 am said:
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Povstane kráľ krutého výzoru! – Sám Jehova sa stal kráľom, on August 30, 2020 at 8:59 pm said:
[…] zamyslite sa znova. Neznáme väčšina ľudí, súkromná peňažná spoločnosť známa ako BlackRock, vhodne nazvaná upíri chobotnice, s kontrolnými záujmami prakticky vo všetkých spoločnostiach kótovaných na indexe S&P, […]

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Lockdowns, Coronavirus, and Banks: Following the Money | PROPHECY OF NOAH, on September 12, 2020 at 1:13 am said:
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Lockdowns, Coronavirus, and Banks: Following the Money – Radio Free, on September 12, 2020 at 5:18 pm said:
[…] purchase “safe federally-guaranteed assets.” As a private company, BlackRock apparently faces no such restrictions. It can purchase more risky assets not backstopped by federal […]

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PostPosted: Sat Oct 03, 2020 12:00 pm    Post subject: Reply with quote

BlackRock Should Be Seized for Crimes Against the Earth
Even after its new pivot to sustainability, BlackRock will still be the world’s largest investor in fossil fuels.
EO
By Edward Ongweso Jr
14 January 2020, 5:27pm

https://www.vice.com/en/article/qjdb4d/blackrock-should-be-seized-for- crimes-against-the-earth#

BLOOMBERG / CONTRIBUTOR
BlackRock, the world's largest asset manager, announced Tuesday it would now consider sustainability and climate change when making decisions with its nearly $7 trillion in investments. This decision doesn’t undo a legacy of environmental destruction and its announcement is full of half measures and caveats. We should be arresting BlackRock’s executives, not lauding them.

This comes after years of dragging its feet on addressing its fossil fuel investments: BlackRock has not only profited from being the largest investor in coal worldwide (companies and mines), but blocked attempts by its polluter investments to create meager emissions targets or even create “scenario planning” for climate change.

"Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance," Laurence Fink, founder and CEO of BlackRock, wrote in the letter. "The evidence on climate risk is compelling investors to reassess core assumptions about modern finance."

While this is a welcome development from Fink's position just last year ("Our decisions are driven solely by our fiduciary duty to our clients"), it doesn’t erase decades of enabling and profiting from the companies that are destroying the Earth. And it’s still a half measure: BlackRock says it will simply now assess climate-related risk from a financial perspective, and that it will be “making sustainability integral to portfolio construction and risk management.” In practice, BlackRock will still remain one of the world’s largest investors in fossil fuel companies: “We need to be mindful of the economic, scientific, social and political realities of the energy transition.“

What will BlackRock do with the untold billions it has made from companies responsible for climate change? How aggressively will it pursue sustainable investments? What happens to medium sustainability-related risk investments? Will it invest in projects to repair the damage it has made a killing off of? What does divestment look like?

For years, protesters have asked similar questions because of BlackRock's commitment to profit at the expense of the Earth and its inhabitants. Its investments accelerate not only climate change but ecological decay and collapse: deforestation, air and water pollution, and declining biodiversity all have adverse effects on humans today and for generations to come. Is BlackRock’s new investment strategy going to address the damage it has already wrought?

It does not seem likely any of these questions will likely be addressed in any substantive way because, as Fink insisted in an interview with the New York Times, the decision was a business one: "We are fiduciaries," Fink told The Times. "Politics isn't part of this."

The problem is that how we deal with climate change is inherently a political question. Climate change, even in the best-case scenarios, will be responsible for the deaths and displacement of hundreds of millions of people and an untold number of plants and animals.

BlackRock chose to make its investments decades after climate change and its effects were well known to scientists, chose to block attempts by its companies to reduce their role in emissions, and chose to preserve its investments for decades all in the name of profit.

BlackRock doesn’t deserve praise for choosing an investment strategy that centers climate change, it deserves a trial for its role in these crimes against humanity and the Earth. This world is marred with scars inflicted by the business models championed by BlackRock for decades.

Real divestment is not whatever BlackRock is doing, although its move is at least better than maintaining the status quo. Real divestment begins with a trial and continues forward with moves to takeover extractive companies, wind them down, provide for their workers, provide for the communities they’ve extracted labor and resources from, and make amends with the Earth.

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PostPosted: Sat Oct 03, 2020 12:01 pm    Post subject: Reply with quote

How BlackRock Rules the World
The planet’s largest investment fund handles Mexico’s pension funds—and owns the companies they invest in. Cozy!

BY DAVID DAYEN SEPTEMBER 27, 2018

Expand
ap_18025448691598.jpg.jpe
(LAURENT GILLIERON/KEYSTONE VIA AP)
https://prospect.org/economy/blackrock-rules-world/

A new pecking order has emerged on Wall Street. Big banks remain powerful and incredibly profitable—quarterly income has hit record levels throughout 2018, largely due to benefits from the tax cuts. But a decade of financial crisis, regulatory pressures, and (most important) new investing trends has transferred power to a few dominant asset management firms. As more Americans plow retirement savings into passive funds, the buy side has overtaken the sell side.

Buoyed by an index fund collection called iShares that it purchased from Barclays, BlackRock is the world's largest asset manager, with $6.3 trillion of other people’s money under its control. BlackRock’s Aladdin risk-management system, a software tool that can track and analyze trading, monitors a whopping $18 trillion in assets for 200 financial firms; even the Federal Reserve and European central banks use it. This tremendous financial base has made BlackRock something of a Swiss Army knife—institutional investor, money manager, private equity firm, and global government partner rolled into one.

The BlackRock Transparency Project, an initiative from the Campaign for Accountability, a watchdog organization focused on public corruption, seeks to demystify the firm’s “access and influence” business model. BlackRock forges close relationships with governments to outpace competitors, attracting special benefits and avoiding onerous regulatory standards. Since 2004, researchers note, BlackRock has hired at least 84 former government officials, regulators, and central bankers worldwide. This can quickly bleed into conflicts of interest and official corruption.

For example, it's no secret that BlackRock

CEO Larry Fink built a shadow government of former agency officials in a bid to become Hillary Clinton’s Treasury secretary. That didn’t stop Fink from becoming part of the main private-sector advisory organization to Donald Trump until that panel disbanded after Charlottesville.

Links to leaders in both parties have enabled BlackRock to successfully fight designation as a systemically important financial institution, keeping its trillions outside the Dodd-Frank regulatory perimeter. The Treasury Department official leading efforts to relax that designation and keep asset managers outside its grip is Craig Phillips, a former BlackRock executive.

This model of fused BlackRock/government relations doesn't stop in the United States, as researchers at the BlackRock Transparency Project have laid out in a series of reports. The first focused on Canada's Infrastructure Bank, a public-private partnership for low-cost loans for road and bridge projects, which BlackRock advised on creating and helped staff with friendly executives. BlackRock subsequently stands to gain from the bank it helped construct.

The latest report, provided exclusively to the Prospect, details a deep tangle of relationships between BlackRock and the outgoing government of Enrique Peña Nieto in Mexico. This has bolstered BlackRock’s efforts to generate an infrastructure business in Mexico from scratch. Since 2012, BlackRock has purchased stakes in Mexican toll roads, hospitals, gas pipelines, prisons, oil exploration businesses, and a coal-fired power plant.

Alternative investments like infrastructure projects return higher yields than stocks or bonds. Operating fees are as much as triple those from fixed-income investments, making them lucrative for BlackRock as well. BlackRock’s 2013 annual report featured a section called “The Infrastructure Opportunity,” explaining how its prodigious funds—in particular, pension funds—could fill the gap governments needed to modernize and upgrade their public works.

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To make an infrastructure play work, you need a willing government partner. When Peña Nieto took power in Mexico, nearly half of his expressed commitments involved using private capital for infrastructure, including $590 billion in public-private partnerships. BlackRock praised his boldness: “Mexico is an incredible growth story,” Fink said in 2013. “If I were 22 years old and I didn’t know what I wanted to do, I would move to Mexico right now because I think the opportunity is huge there,” he later added.

The opportunity was indeed huge, if you happened to be BlackRock. The firm benefited from the controversial opening of PEMEX, the state-run oil monopoly, to private investment. Within seven months, BlackRock had secured $1 billion in PEMEX energy projects. In June 2015, BlackRock acquired a scandal-ridden Mexican private equity firm called I Cuadrada for $71 million. A month later, Sierra Oil and Gas, a year-old portfolio company of I Cuadrada that had never drilled an oil well, won two major exploration contracts from PEMEX. Sierra was the only bidder.

In another suspicious deal, a contractor named Grupo Tradeco continually missed deadlines for building a private prison in Coahuila state, with accusations of 2.5 billion pesos in waste. But right before BlackRock bought the project, Peña Nieto increased the construction payments for the prison by 18 percent. A third deal involved BlackRock purchasing a contract to build a toll road between Toluca and Naucalpan. A month later, Peña Nieto signed an executive order to resolve a legal dispute over siting the road through what indigenous groups consider sacred land, expropriating 91 acres for the project.

Clearly, BlackRock benefited from its ties to Mexican officials and luminaries. The son of Carlos Slim, Mexico's richest man, is a BlackRock board member. Mexico’s former undersecretary of finance, Gerardo Rodriguez Regordosa, became a managing director in 2013. The CEO of BlackRock Mexico, Isaac Volin, was previously a national bank regulator, and in 2016 he became the general director of a PEMEX subsidiary. Peña Nieto himself met with Larry Fink prior to his election and numerous times afterward.

In addition,

BlackRock exploited changes in Mexican law allowing asset managers to take control of Mexican pension funds.

By placing hundreds of millions of dollars in pension money into its Mexican infrastructure business, BlackRock puts Mexico's state and local governments in an impossible position, says Josh Rosner, an adviser to the BlackRock Transparency Project and co-author of the report.

“If a BlackRock-owned infrastructure project becomes ‘a road to nowhere,' and the government wants to stop funding the project, BlackRock can put the official over a barrel and say, ‘You're putting a loss on pensioners,'” Rosner says. “This would force the public official to choose between a waste of public monies and the risk that they would suffer a political loss of voters.” Such an arrangement virtually guarantees conflicts of interest, and possible corruption, in these projects.

BlackRock's shopping spree in Mexico could be threatened by the July election of leftist Andrés Manuel López Obrador. AMLO, as he's often nicknamed, singled out the PEMEX deal with Sierra Oil and Gas, referring to BlackRock as “the white-collar financial mafia” on Facebook. AMLO’s handpicked energy minister, Rocío Nahle García, has called for the removal of Volin from PEMEX, amid what whe termed “marked favoritism” for companies like BlackRock.

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Predictably, BlackRock reacted negatively to the AMLO victory, stating in a “geopolitical risk” report that “deterioration in Mexico’s economic policy” could ensue from it. But its position softened somewhat after a June meeting between AMLO and CEO Fink. So has AMLO’s. He initially promised to reverse all of Peña Nieto’s energy reforms, but now has said he’d merely review PEMEX contracts. And in meetings with BlackRock and dozens of investment funds, AMLO’s top adviser said, “We are really not leftist, we are center-left,” while vowing to stay the course on free trade, central bank independence, and a floating currency.

It seems AMLO has understood what Clinton adviser James Carville learned at the outset of his boss’s presidency: “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.” In Mexico and around the world, a large share of that financier clout is wielded by BlackRock. Such power and influence, often at odds with the public good and combined with potential hazards for the overall financial system, demands additional scrutiny.

_________________
www.lawyerscommitteefor9-11inquiry.org
www.rethink911.org
www.patriotsquestion911.com
www.actorsandartistsfor911truth.org
www.mediafor911truth.org
www.pilotsfor911truth.org
www.mp911truth.org
www.ae911truth.org
www.rl911truth.org
www.stj911.org
www.v911t.org
www.thisweek.org.uk
www.abolishwar.org.uk
www.elementary.org.uk
www.radio4all.net/index.php/contributor/2149
http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
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PostPosted: Sat Oct 03, 2020 12:05 pm    Post subject: Reply with quote

Icahn Called BlackRock “An Extremely Dangerous Company”; the Fed Has Chosen It to Manage Its Corporate Bond Bailout Programs
By Pam Martens and Russ Martens: March 30, 2020 ~
https://wallstreetonparade.com/2020/03/icahn-called-blackrock-an-extre mely-dangerous-company-the-fed-has-chosen-it-to-manage-its-corporate-b ond-bailout-programs/

Carl Icahn Created a Cartoon About BlackRock and Its Junk Bond ETFs Going Over a Cliff

In 2015, the legendary Wall Street investor, Carl Icahn, called BlackRock “an extremely dangerous company.” (See video clip below.) Icahn was specifically talking about BlackRock’s packaging of junk bonds into Exchange Traded Funds (ETFs) and calling them “High Yield,” which the average American doesn’t understand is a junk-rated bond. The ETFs trade during market hours on the New York Stock Exchange, giving them the aura of liquidity when one needs it. Icahn said: “I used to laugh with some of these guys…I used to say, you know, the mafia has a better code of ethics than you guys. You know you’re selling this nonsense.” Icahn warned that “if and when there’s a real problem in the economy, there’s going to be a rush for the exits like in a movie theatre, and people want to sell those bonds, and think they can sell them, there is no market for them.”

BlackRock not only sells junk-rated bond ETFs under the brand name iShares, but it has some of the largest investment grade corporate bond ETFs, including one that trades under the stock symbol LQD, which was experiencing serious losses and seeing major outflows of money until the Federal Reserve announced recently that it was creating three facilities to buy investment grade corporate debt from the primary and secondary markets, as well as investment grade corporate bond ETFs, along with agency commercial mortgage-backed securities.

And just who is going to be running these facilities for the Federal Reserve? None other than BlackRock – posing an enormous conflict of interest which was readily observable in the market as BlackRock’s investment grade ETFs rallied dramatically on the news.

According to the “Terms of Assignment” the New York Fed released, BlackRock will be allowed to buy up its own corporate bond ETFs as well as those of its competitors. The only caveat in the contract is this concerning the Fed’s Secondary Market Corporate Credit Facility (SMCCF):

“BlackRock will treat BlackRock-sponsored ETFs on the same neutral footing as third-party ETFs. All ETF transactions will be effected through intermediaries at market prices on a best execution basis, whether in the secondary market or via primary creations and redemptions. If the share of the SMCCF’s holding of BlackRock-sponsored ETFs exceeds or is expected to exceed the then-current market share of BlackRock-sponsored ETFs in the corporate bond ETF market on average over a given calendar month, BlackRock will notify the New York Fed for review and consultation. The New York Fed may direct portfolio adjustments at any time.”

This document labeled “Terms of Assignment” does not appear to be the full contract between the Fed and BlackRock for purchasing, selling and managing the Fed’s corporate bond portfolios.

A much more detailed contract appears on the New York Fed’s website for BlackRock’s management of the agency commercial mortgage-backed securities facility. That contract reveals this:

“…the Manager is hereby appointed as the FRBNY’s [Federal Reserve Bank of New York] agent in fact, and it shall have full power and authority to act on behalf of the Account with respect to the purchase, sale, exchange, conversion, or other transactions in any and all stocks, bonds, other securities, or cash held for investment subject to the Agreement…

“The Manager shall initially meet at least weekly with the FRBNY and any other investment managers participating in this FOMC directive to discuss strategy. Absent agreement from the FRBNY, these meetings should be attended only by individuals at the Manager who are behind the ethical wall established by the Manager…

“The Manager acknowledges that all information and material that comes into the possession or knowledge of the Manager on or after March 22, 2020…including the identity and amount of the assets held in the Account…shall be considered to be confidential and proprietary…providing the FRBNY, at the expense of the FRBNY, with all reasonable assistance in resisting or limiting disclosure.”

Picking a highly conflicted Wall Street firm to manage a taxpayer-subsidized bailout of the highly reckless and irresponsible securitization practices of Wall Street is nothing new for the Federal Reserve and its unlimited money spigot, the New York Fed. The Fed did the same thing during the financial crisis of 2008. (See The New York Fed Has Contracted JPMorgan to Hold Over $1.7 Trillion of its QE Bonds Despite Two Felony Counts and Serial Charges of Crimes.)

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PostPosted: Sat Oct 03, 2020 12:05 pm    Post subject: Reply with quote

Former BlackRock fund manager jailed for 12 months for insider trading
By Andrew MacAskill

3 MIN READ
https://uk.reuters.com/article/us-britain-insidertrading-lyttleton/for mer-blackrock-fund-manager-jailed-for-12-months-for-insider-trading-id UKKBN14A1K1

LONDON (Reuters) - A former star fund manager in the London office of asset manager BlackRock BLK.N on Wednesday was sentenced to 12 months in jail after pleading guilty to two counts of insider dealing.


The logo of the new Financial Conduct Authority (FCA) is seen at the agency's headquarters in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren
Mark Lyttleton, 45, admitted buying shares in EnCore Oil and Cairn Energy CNE.L ahead of public announcements from both firms, after hearing privileged information from colleagues.

Lyttleton wearing a gray suit, a blue-and-white tie and white shirt sat impassively as the verdict was read out in a London court.

The Financial Conduct Authority, Britain’s markets regulator, said he made a net profit of about 35,000 pounds by buying the two stocks through an overseas asset manager trading on behalf of a Panamanian-registered company.

Lyttleton is one of the highest-profile figures to be sentenced in Britain for insider trading. His funds were popular with investors during the financial crisis after he posted positive returns. At the peak he personally managed assets worth about 4.5 billion pounds ($5.6 billion).

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Judge Andrew Goymer said an extraordinary aspect of the case was that Lyttleton was already wealthy, he was under no financial pressure and the gains were small relative to his overall earnings.

“It is inexplicable that he should have thrown all of this away in the conduct that he did,” he said. “The defendant had no need for the money because he was earning a good income.”

Lyttleton made about 45,000 pounds from buying shares in EnCore after hearing that it may be subject to a takeover bid. A month later, he lost 10,000 pounds trading in Cairn Energy after being told the firm would record positive drilling results in Greenland, which subsequently proved to be not as good as hoped.

The financial regulator said Lyttleton tried to hide his dealings by using unregistered mobile phones and setting up a company in his wife’s maiden name.

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Lyttleton spent 21 years working in financial services. His interest in finance started when he won the Daily Telegraph newspaper’s stock picking competition aged 7, and at university he began working as an intern at an asset management company. His defense lawyer, Patrick Gibbs, said the illegal trades were made when Lyttleton was depressed and under pressure in his job after his funds began underperforming.

“He looks back on these events and thinks ‘what on earth was I doing,’” Gibbs said.

Insider trading is an offense in Britain that is punishable by up to 7 years in prison.

The markets regulator has secured more than 30 insider dealing convictions since starting to prosecute this crime more aggressively in 2009. Since leaving BlackRock, Lyttleton has become a personal coach and a Reiki practitioner, according to his LinkedIn account.




Quote:
German police raid BlackRock offices
BlackRock controls trillions of dollars of assets and has now been caught up in the monumental cum-ex tax scandal. The investment fund's involvement has particular significance for the German government.
https://www.dw.com/en/german-police-raid-blackrock-offices/a-46182751
 
From 2018

German investigators raided the offices of finance giant BlackRock on Tuesday, several media outlets reported.

The raid is part of the country's biggest post-war fraud investigation, known as the cum-ex scandal.

BlackRock told DW it is "fully cooperating" with investigators. The chairman for its Germany division, Friedrich Merz, said he had ordered management to "investigate all instances and make documents available to authorities."

What is the cum-ex scandal? The scandal came to light in 2016 when it emerged that several German banks had exploited a legal loophole which allowed two parties simultaneously to claim ownership of the same shares. This contrived "dual ownership" allowed both parties to then claim tax rebates even though both were not entitled to it. The scandal cost taxpayers billions of euros.

Read more: Cum-ex tax scandal cost European treasuries €55 billion

Watch video08:07
The Day – Tax Scam
What is BlackRock? It is a vast investment management organization that oversees more than $6.4 trillion (€5.6 trillion) in assets — putting it on par with the world's third biggest GDP. BlackRock is also the biggest stockholder on the German DAX blue chip market index. On top of asset management, it also advises central banks, financial ministries, big investors like state funds, pension funds, insurance companies and foundations.

What is the significance for German politics? The raids could make things tricky for chairman Merz. The Christian Democrat politician is a leading candidate to succeed German Chancellor Angela Merkel as party leader when she steps down. The scandal predates Merz's time at the company, however, the Greens have seized upon the raids to question the government's commitment to prosecuting those involved. Investigators later clarified that Merz was not suspected of any wrongdoing.

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www.v911t.org
www.thisweek.org.uk
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www.elementary.org.uk
www.radio4all.net/index.php/contributor/2149
http://utangente.free.fr/2003/media2003.pdf
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
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