BlackRock Inc.

[drstrangelove]

Also: this churn cycle of creating and inflating assets comes from the intersection of intelligence agencies and organized crime. These are, fundamentally, fund-raising engines for black ops, long since ISO 9001 standardized into technically complex but dumb simple templates.

The actual ops are transitory things: sure, JFK/RFK bleeds into Iran Contra and that spills into Savings & Loans, but the big engine behind all of that is implacable and immense -- as neutral as a programming language, the FORTRAN of transnational finance and intrigues.

That overall system is facing some existential risks right now and trying to navigate a very difficult decade to come, so we're at an opportune moment for limning the contours of the con. As for defeating it or upending it or replacing it, I am far less optimistic.

Also also recommend Anthony Sampson's The Money Lenders, Robert Gilpin's twin towers, The Political Economy of International Relations and Global Political Economy despite being quite hella extremely dry, and more recently, Lee & Lee's The Rise of Carry, a technical but entertaining exposition whereby some hedge fund economists strain to chart the movement of leviathan, misdiagnosing this magnificent malevolence as a market dysfunction. They do at least have to stones to admit there is no fix for it.

That same team recently published a commentary on the current state of play, "The End of Carry?" which is holding up well since January 2021 and available for free online.

I was actually going to pm you for resources on this stuff but it seems esp was good enough. thanks.

[Wombaticus Rex]

Two great granular books on specific scams that are illustrative of the larger system:

Alan A. Block, Masters of Paradise about that "intersection of intelligence agencies and organized crime" as it relates to Resorts International, which was the org that blooded Trump into the gang. (His All Is Clouded By Desire is less cohesive but also extremely valuable primary research related to BONY's relationship with Russian gang/bank capital flight; I have always gotten the sense he wasn't able to publish several chapters but haven't confirmed that with him.)

Then there's Pete Brewton's The Mafia, CIA and George Bush which is by far the best (and most thoroughly investigated) account of the S&L operation available. Still woefully incomplete, but that of course just speaks to your point about grains of sand back on the previous page. Accounting for just a dozen or so of the operators involved took a whole book.

[Joe Hillshoist]

So essentially the price of oil stayed the same in terms of gold but changed in terms of the most used currency?

Or tried to.

Well the price of oil to gold increased while the price of gold to oil decreased. So more barrels of oil were needed to buy an ounce of gold, and an ounce of gold would buy more barrels of oil. That is, until OPEC raised its prices.

On August 15, 1971, the United States unilater- ally and without consulting allies or the IMF closed the “gold window.”6 With this “floating” of gold, the world moved from a fixed to a flexible exchange-rate sys- tem as countries followed West Germany’s lead and stopped interventions in the foreign-exchange markets once the United States stopped buying dollars with gold (James 1996, 220).
Gold was initially revalued to $38 per ounce, then to $42, and shortly thereafter it was allowed to float freely. By mid-1973, the dollar price of gold had risen to $90.50 per ounce, and by the end of the decade it had risen to more than $455—an increase of 1,200 percent in less than a decade.
As the world adjusted to a new international trading arrangement, currency mar- kets experienced turmoil. From early 1971 to mid-1973, the U.S. dollar fell dramati- cally relative to all Western currencies except the pound sterling. It fell more than 30 percent against the Deutschmark and the Swiss franc, and more than 20 percent against the currencies of Japan, France, Belgium, Holland, and Sweden. On average, by mid-1973 the U.S. dollar had fallen by 25 percent relative to the major Western currencies. Given that oil contracts were stipulated in U.S. dollars, this decline meant that oil revenues per unit from these countries fell to OPEC.

. . .

In 1970, slightly more than 10 barrels of oil would purchase an ounce of gold.8 By the next year, when the Bretton Woods agreement ended, with gold priced at $42 and oil fixed in terms of U.S. dollars at $3.56, oil sellers needed nearly 12 barrels of oil to buy an ounce of gold. This “real” oil price decline, and general worldwide infla- tion did not go unnoticed in the oil-producing countries. In 1971, OPEC built in a 2.5 percent annual inflation factor by which to adjust the nominal (U.S. dollar) price of oil.

Yet, by mid-1973, nearly 34 barrels of oil were required to buy an ounce of gold. In little more than two years, the gold price of oil had fallen by more than 70 percent, and the oil price of gold had risen by almost 200 percent.

. . .

On January 1, 1974, OPEC raised the U.S. dollar price of oil from $4.31 to $10.11, producing the first dramatic price shock. After this increase, the “gold price” of oil (at 12.8 barrels per ounce of gold) was back within its historical range. For the rest of the decade, including the second dramatic price rise in 1979, the gold price of oil stayed within its historical range. At the end of the decade, 14 barrels of oil exchanged for an ounce of gold, well within its historical range but with a “real” price approximately 25 percent lower than at the beginning of the decade.

- https://www.independent.org/pdf/tir/tir ... hammes.pdf

So we know what happened. The interesting question is whether the people advising Nixon, like Peter G. Peterson, knew this would happen before it did happen. If they did know, then why did they do it?

So essentially the price stayed the same, it fluctuated for a while but returned to its historical range. That's kind of what I meant and it does bring us to you question.

The interesting question is whether the people advising Nixon, like Peter G. Peterson, knew this would happen before it did happen. If they did know, then why did they do it?

They must have known. Or not ... I mean its hard to tell with hubris. Surely they must have known that the arabs who were selling the oil would work out they were losing out by not raising the price to a "gold standard" lol. But then hubris is a real thing, maybe they assumed they were stupid.

However what they did was interesting. They decoupled the us dollar from gold but also from oil - the price of energy. But everyone still assumes the US dollar is somehow tied to the value of oil thru some mechanism of value because its traded in US dollars. LOL it isn't.

Now if you knew that was what you were doing you could make a lot of money forever. And basically control the world.

Funny that it coincided the same economic crisis that basically led to neo liberalism and austerity nas economic policies.

[drstrangelove]

So it looks like those ETFs you were talking about are almost ALL managed on BlackRock's Aladdin software.

Vanguard and State Street Global Advisors, the largest fund managers after BlackRock, are users, as are half the top 10 insurers by assets, as well as Japan’s $1.5tn government pension fund, the world’s largest. Apple, Microsoft and Google’s parent firm, Alphabet — the three biggest US public companies — all rely on the system to steward hundreds of billions of dollars in their corporate treasury investment portfolios.

Yet the true reach of Aladdin is unknown outside of BlackRock. The New York-based manager last revealed exactly how much of the world’s assets sit on the system in February 2017, when they reached $20tn. BlackRock told the FT that total assets do not reflect how clients use the system. One former employee says the figure is no longer disclosed because of the negative attention the enormous sums attracted. In the past three years, Aladdin has added scores of new clients, the stock market has gained a third in value and the bond market is 13 per cent larger.

Though Aladdin does not tell asset managers what to buy or sell, some argue that if a large portion of global assets respond to the warnings that Aladdin gives off, trillions of dollars will react to events — such as the outbreak of a pandemic or war in the Middle East — in the same way, causing dangerous herding behaviour. The more investment managers and asset owners rely on Aladdin to gauge risk, the less responsible they become for their portfolio decisions.

https://www.ft.com/content/5ba6f40e-4e4 ... d18ec715f5

That's probably half the world's pension funds hooked up to BlackRock's bag holding mainframe. This software dates back to the early 90s supposedly as well. Zero info on who actually developed it. Gives me PROMIS vibes.

[Wombaticus Rex]

That's probably half the world's pension funds hooked up to BlackRock's bag holding mainframe. This software dates back to the early 90s supposedly as well. Zero info on who actually developed it. Gives me PROMIS vibes.

I definitely think so, too. (I've also always suspected that Madoff wasn't just doing a ponzi scheme, he was doing something black box with NASDAQ itself.)

I recently found out, going back over how the Going Direct shit played out, that there are indeed corporate bond ETFs -- from zero to $600 billion worth of holdings since 2007, in fact! So you were completely correct to intuit this would be a mechanism for stuffing mystery meat into REIT / CDO style tranche farms and selling it to institutional investors as a safe hedge.

[Belligerent Savant]

.

Minor formality.


https://twitter.com/RudyHavenstein/stat ... 93249?s=20

Quote from Fink in the above-linked video clip:

"markets don't like uncertainty; markets like.. actually, totalitarian governments where you have an understanding of what's out there.. and obviously, uh, the whole dimension is changing now with the 'democratization' of countries.. and democracies are very messy as we know in the United States.... you have opinions changing back and forth..."

On EDIT: that video clip of Fink is quite old. I believe it may be from way back in 2011, though others here may be able to obtain a more precise datestamp. It was likely shared in RI before. The key point here is that he alludes to the U.S. as a democracy. Such a statement could have been uttered back in 2011 without a smirk from most viewers. Now, in 2022, even "centrists" may scoff at the notion.

https://www.weforum.org/reports/annual-report-2019-2020

As Founder and Executive Chairman Professor Klaus Schwab writes, the achievements of the year reflect our dedication to three narratives:

“First, our commitment to ‘stakeholder ideology’ as the paradigm for responsible leadership in today’s world; second, the belief that the big challenges in the world can best be met through public-private cooperation; and third, our conviction that we must shape and leverage the Fourth Industrial Revolution for good, and need always to remain at the forefront of innovation.”

[Joe Hillshoist]

Pretty sure it was 2011.

[drstrangelove]

Looks likes there's a play going on with Reo-to-Rental mortgages. Which in plain terms is rent-backed bond securities.

So after 2008 Freddie Mac & Fannie Mae acquired all the shitty properties from the banks after they had all acquired each other through the TARP bailouts. They held onto all the good stuff and the shit was sold to the govt at a premium.

The govt ended up with all these residential houses no one could afford, but this also extended to commercial real estate as well. The US Treasury created a new position and appointed a Merrill Lynch VP to the role. Control of FMAC&FMAE and thus all their assets was then taken over by the Treasury and overseen by the person in this new position. They then contracted BlackRock to manage liquidation of these assets.

BlackRock then created these new things, I think they are new anyway, called rental-backed securities. The res properties were bundled together and either sold or farmed out to rental corporations who would find tenants. These packages of rental properties were then sold as bonds rated by the underlying value of rent they generated.

So what were mortgage backed securities were recycled back onto the market as rental-backed securities. This has been happening since 2008. I think these rental-backed securities started to be traded on the stock market as REITs around 2011-2013. Then I think BlackRock and the like created real estate ETFs out of these.

It's interesting to note that since march 2020, all around the world governments have put in place rent moratoriums. Which means for almost two years tenants more or less have had the option not to pay rent. What this would've achieved, along with providing economic relief to those who desperately needed it, was probably two other things:
1) a reduction in the number of small-medium landlords who could no longer rely on quasi-parasidic incomes.
2) a massive reduction in the underlying value of rental backed securities.

I think the whole economic cycle since 1971 has been about property. Real Estate. The creation of a renter-landlord relation between corporations and people. Once this relation has been instituted, and automation replaces operational level roles in the jobs economy, renters will no long be bale to pay rent from generating incomes. If renter income is removed then renter populations become unproductive serfs. Assuming landlords wouldn't just go about liquidating what they see as superfluous life, the only way renters would be able to pay rent is through good behaviour. Which is of course the notion of universal basic income pegged to a social credit score.

If the primary human need is for security. And this is largely provided for through access to food and shelter. Then what's been happening since the1970s with GMO foods and the property market starts to make a whole lot of sense.

What they are doing now with property, is trying to conflate home-ownership with rent. There are a bunch of BlackRock owned(through stock) corporations that now buy properties for prospective 'homeowners', through a rental agreement which allows the renter to purchase the home back from the company after 5 or so years.

In fact everything that is happening right now is the semantical fuckery of ownership. This is what an NFT is. This is what mortgages have become. In fact, it could be argued that for the past couple of decade there hasn't been much of a difference between a mortgage and a lease.

Which leaves the question, what can be done about all this? Nothing at any level other than at the community level. And at the community level the ones which survive WHILE preventing their culture becoming governed by corporate policy are those which have their own sustainable food supplies. Assuming force isn't used, the Amish will be fine, especially the older orders. I wouldn't because I'm an urban child suckling on corporate breast milk. But I'm trying to pick up gardening as a hobby. The ancient neolithic gardening cultures were the ones antithetical to the warlike sun god, perpetual growth heroic warrior tribes that ended up dominating western civilisation. Which is to say, they were the sustainable alternative to growth by using qualitative and intensive adaptions of their productive capacities, as opposed to quantitative and extensive acquisition of more productive capacity through expansionary wars.

This is why these fucks corrupt the seeds. Putting their nanoparticle synthetic jizm inside to impregnate the natural cycles with synthetic growth. I really should grow a garden.

[drstrangelove]

The biggest private-equity landlords, led by Blackstone Group LP's Invitation Homes, have sold more than $15 billion ($20.3 billion) in bonds backed by some 120,000 rental homes, according to data from Morningstar, and many of those deals were valued using BPOs. One recent bond deal tied to Invitation Homes was backed by guarantees from US taxpayers.

. . .

The BPOs are key elements in securitisations, determining basic figures such as how much rent to charge tenants, how much leverage and risk is embedded in the deal and how much investors could recover if the bonds go sour. Many of the securities were assigned AAA grades and sold off to investors such as pension funds.

- https://www.afr.com/property/sec-probes ... 509-gw0q8y

BlackRock was hired by the Treasury to manage the liquidation of residential homes acquired by the government companies Fannie Mae and Freddie Mac. BlackRock then auctioned these off to Blackstone owned private rental corporations. But part of the deal was that the government would back Blackstone's securitisation of them, as if they were fucking treasury bonds.

[drstrangelove]

The thing is, these rent-backed securities would appear to be only bad if there were lots of vacancies. But the assumption that an occupied property is generating rent becomes completely thrown off by govt rent moratoriums.

Now, all these houses acquired and rented out by Blackstone are the same ones that created the MBS crisis back in 2007, which means they are concentrated in specific State's of America. Laws governing rent controls are handled by the individual States.

If one were to figure out which States the houses used to generate the majority of rental-backed securities are located, and then figure out which among them have the most generous rent moratorium laws, one could perhaps figure out the worst RBSs that are currently on the market. Then do something with that information.

[Harvey]

I'm glad that somebody else can see it.

[drstrangelove]

More than $30 billion in capital is chasing the surging US rental housing market as bond yields remain at historic lows and inflation rises.

John Burns Real Estate Consulting identified 43 announcements targeting US rental housing, but notes that the real number is likely “much higher” since those figures are only the equity investment and excludes the debt, and does not include announcements that are not yet public.

Single-family rents have increased 6% over the last year, according to the Burns Single-Family Rent Index, the highest growth in the 35 years that John Burns Real Estate Consulting has collected and analyzed such data. The index is a weighted average of rents across 63 major single-family rental markets.

JBREC’s Danielle Nguyen notes that multiple factors can account for the surge in investment activity. Investors typically view SFRs as an inflation hedge, and the aforementioned record-high rent growth is also supported by high occupancy.

- https://www.globest.com/2021/10/19/30b- ... e-to-come/

[drstrangelove]

[alloneword]

Similar picture in the UK:



A couple of differences: There was no moratorium on paying rent in the UK, only on landlords seeking eviction. These protections are now removed (along with 'furlough' payments). If you failed to pay your rent during the eviction moratorium, you'd still owe it and could now be evicted over it (and still pursued for it).

Also in the UK (unlike what I understand to be the case in the US, unsure of Aus) if a mortgage holder defaults whilst in negative equity, they are still on the hook for any shortfall between what they owe and what their repossessed property subsequently fetches (usually at auction). None of this 'keys on the table and walk away' business. Moot point, usually, as bankruptcy is an option.

[alloneword]

Oh, yeah, and...


https://www.youtube.com/watch?v=AWBRldjVzuM

I, for one, welcome our neo-feudal A.I. overlords...