WRFH/Radio Free Hillsdale 101.7 FM - The Social Mediators: Black Rock

Episode Date: October 14, 2024

This week we talk about Black Rock, aka "the company that owns the world." Tune in for financial conspiracy theories, a lucid but apparently irrelevant description of ESG, and a geology lesson!

This is the social mediators on Radio Free Hillsdale 1-1.1.7 FM where we examine the truth disparity between what's on social media and what's actually true. I'm Julian Parks. And I'm Gary Gulesby. And welcome back to the social mediators this week. Today we are talking about Black Rock. Geology? No. No.

Wow. So we research different things. Oh. Oh. This is awkward. Okay. Well, you're going to get a geology lesson from me today about big Black Rocks. No, you're not.

No. Black Rock is a major investing firm that we stumbled across actually in. two episodes. We stumbled across it when we talked about the presidential assassination, because the person who attempted assassination, attempted assassination is probably what I should say. But one of the people who attempted to assassinate Donald Trump was in a Black Rock commercial. Everybody was really going crazy on that one. Obviously this was planned. Right, exactly. And then in the Freemasons episode, I ran into Black Rock a couple times.

Crazy, right? Two times. They're up to some stuff. Money. They're up to money. A lot of it. And honestly, I'm surprised we haven't run into them before because they seem to be ubiquitous. They own the world, actually. Do you know how many times I saw that phrase? They own the world? I'm sure a million. Over and over and over again.

Okay. Well, we'll talk about how much of the world they own. It is actually like, whenever you own more than one percent of a really big thing, it's like, whoa. They own a lot of percent of lots of really big things. This I actually knew. So let's hop into what I know and then you can come in and help me out with what you know. First thing that I think is important to say is that most of what social media has is under the label of conspiracy theory because I don't have a ton of information about Black Rock for real. I just have

a ton of information about Black Rock potentially. First thing is that their CEO, Larry Fink, he's a pretty hated guy on social media. He's really rich. He's got a lot of money. Apparently he has big houses and whatever, as you would expect. And he's not the major shareholder. He's just the CEO, which is pretty typical. But people act like he owns the whole company and he's not even a major shareholder. It's just, I mean, individuals aren't really. BlackRock is among a group of investment firms that kind of have a hand in everything. If you look at like Google, Apple, Target, Walmart, those sorts of corporations.

The top owners of those are pretty much always the same. The top three are Black Rock, State Street, and Vanguard. BlackRock and Vanguard are typically the top two. And then there's a bunch, there's a list of other ones that are also pretty, what's the word I'm looking for ubiquitous I keep using this word um they're kind of everywhere black rock has recently come under fire for well in the words of charlie kirk purchasing single family homes um large amounts of single family homes and then hiking up the rent prices however this has been debunked as it's not black rock that's doing it it's black stone a partner company of them

that's buying out large swaths of homes and family land. But social media was pretty quick to be like, no, that's not true. It's not Black Rock, it's Blackstone. I mean, it's easy to get them mixed up, but they are partner companies. Whatever partner company means, don't ask me. I have absolutely no idea. I watched this really long TikTok that I wish I hadn't watched because it actually killed my brain cells about who owns Black Rock,

like trying to get to the bottom of it. Apparently Merrill Lynch owns like 45% of Black Rock. Merrill Lynch investment management or corporation something along those lines it's a company it's not a person and that's bad because they may be linked to the passier family

pacier I think it's pacer pacier they were like a French aristocratic family that had the most money everyone's like they're the most mysterious family in all of history but they're also the wealthiest family in all of history and you can't find anything about them. And I can't look on the internet, obviously, so I can look on social media. And they're right. On social media, there really isn't a lot about the pace of your family.

It's mostly no information, actually. Just Black Rock comes up. And it's all kind of circular in that way. Another thing that's important to note about these companies, according to these people on social media, is that they all kind of own each other. It's not like Merrill Lynch owns Black Rock. And so Merrill Lynch is the biggest. It's like, then you look at who owns them, and it's Black Rock as well. And Vanguard's the same and State Street. All these corporations kind of co-own each other, so they have a lot of money in a lot of different places to kind of diversify, obviously. Larry Fink, the CEO, recently came under fire because he said that the war in Ukraine is good. The war in the Middle East is good for business and that they're better able to diversify it.

And he says it's a tremendous thing that the economy is still able to grow and multiply in the midst of turmoil. And people didn't like that at all because there's a war and people are dying and he's talking about it in terms of economic gain. I can see why that would make people angry. But I also can kind of see what he's saying is like, what an elastic thing the economy is. But it's also like, where are your values? You don't really have any.

But I got a lot of different stats on how many single family homes Blackstone owns. Hit me with it. Anywhere from 30 by the year of 2020. No. I saw one person that said 30% by 20%. 2035, one person that said 60%, one person that said 44%, and sometimes they just say will own, they don't say by when, which is kind of strange. But those are the numbers I got. BlackRock itself does not purchase individual homes. It like provides capital for mortgages

and investments in like multifamily properties and rental housing, which I guess people are still upset about that, but it's not quite the same thing. And so I think that was kind of an important thing because people were up in arms about Black Rock, specifically this time for that. Generally, people are up in arms about Black Rock, not because of the housing market, but because they own everything. And they're, apparently they're, like, who they donate money to, political spending is private. You can't see that.

And people are upset about that because if you have, I think it's something like $20 trillion or something absurd amount of money. It is absurd. Is it $20 trillion? It's less, but it's still, it's between $6 and $10. Six and ten Okay. Still a lot.

Oh, it's $20 trillion Sorry for Black Rock, Vanguard and State Street. That would make more sense. Black Rock is obviously going to be less than that. But that's a lot of money for those three concentrated entities that all kind of own each other. And that's why people say,

the company owns the world. I guess people are also just afraid of money in general. One thing that I don't understand is that like one guy was talking about how it's sketchy that Black Rocks ESG score is not an automatic zero because of the political thing. So if you can talk about what an ESG score is, that would be helpful to me because I have no idea what that means. Yeah, I think that's most of the information I have.

People, to kind of sum it up for people who are just tuning in, this is the social mediators on Radio Free Hillsdale, 1.1.7 FM. I'm Jillian. And I'm Gillian. And we're talking about BlackRock. But basically what social media is saying is right now they're upset about the housing thing and the fact that they're buying up these houses. although it's not Black Rock, it is Blackstone, buying up houses and then hiking up the prices and ruining kind of competition and the ability to, I don't know, afford a house.

They're pinning that on these big investment firms. But generally people are mad at them because they have a lot of money and they're very powerful and that causes people to worry. I think for good reason, but I haven't heard any of those good reasons. You know what I mean? I don't know any of those good reasons why they're so scary. It's just like money, money, money, scary. They're big and they have a lot of money.

That's exactly what I hear. So I'd love to hear kind of maybe if they've done anything sketchy, if there's anything that you can provide there. But otherwise, Garrett, you are free to take it away. Fantastic. Well, just on kind of the high, the 30,000 foot view, you're right. Black Rock is a huge asset manager. About $10 trillion in managed assets.

And they have a market capitalization of $112.85 billion. That's the total number of share. shares of the company multiplied by the price per share. So there's what the company itself is worth, and then there's the assets that the company manages. So all these big companies, individuals, countries will give, essentially give BlackRock their money and say, like, show us how to invest this, right? Just like you would do with your personal financial advisor, but on a much bigger scale, they also provide like technological solutions to help companies optimize and things like that. And they do this not just for individual, like the Bank of Ireland, right,

is like a company, or not a company, but a client of Black Rock. Wow. So is the New York Federal Reserve. So these huge entities, Kuwait, like just the whole thing. Kuwait actually owns 5% of Black Rock, fun fact. Did not know that? Yeah, just a fun little thing. Do they count as an individual share?

Like, what do they get categorized as, like their own company? Yeah, let's talk about how shareholding and like percentage and ownership of the company works. because you mentioned companies all kind of owning each other and other countries that own shares in this? What does that mean? So when you have a publicly traded company, right, there's however many shares they put out, different entities, whether they be business, other businesses or individuals or countries, can own shares. And then however percentage of a share they own, there's a certain threshold over which

they start to have say in how the company runs. So let's take Vanguard, for instance, right? Vanguard has shares in Black Rock, which means, and they have quite a few, which means that they have representation on the board of Black Rock. So they have Vanguard people that come and are part of that board and help make decisions about how the company is going to run and how they're going to make their money. So Kuwait, at a 5% interest, I'm actually not sure what Black Rock's threshold would be, but I'm pretty sure Kuwait would have a representative of some kind being that big of a shareholder, who would essentially just represent Kuwait's interest in how

Black Rock operates. This is like on their board of directors. What does that mean? Yeah. So it's hard to talk about a company this big being run by one guy, right? Yeah. Larry Fink, he is the chief executive officer. So he is like 50,000 foot view kind of directing traffic, right?

Okay. But he's not, you know, he's not a dictator, right? He reports to the board. And then the board as a collective, which is just a bunch of really rich guys, basically, getting together and talking about how does Black Rock want to spend their money? That's crazy. Yeah. Yeah, well, and how do they want to help their customers best?

Because they're a business, right? Right. So they're going to do whatever it takes to maximize their customers' profits, because when their customers succeed, they succeed. And this is kind of where we get into how, like, what do they own and why is that important? Just some kind of the big things that stood out to me in terms of their ownings. They own like almost 15% of Disney, which is a huge percentage of such a big. big company. But they also own equally large, and in some cases, larger stakes in Comcast, CBS,

CNBC, MSNBC, Fox, and a bunch of other media companies. Those are kind of the ones that I think people get the most up in arms about because they say, BlackRock has a lot of pull in these media companies that have kind of opposing political ideologies. So where they throw their money is really important, where they choose to invest, how they choose to make mortgages or other. other financial tools available to different people in different political situations is very telling of the company's political leanings. So you mentioned they come under fire about ESG. That's a political thing.

It stands for, let's see, ESG stands for environment, social and governance. Okay. Environment, social and governance. What that means is it's an economic strategy basically that a company will take on an ESG economic strategy by saying, okay, we're going to invest our money in projects that are trying to aid things like lowering carbon emission or eliminating discrimination in the workplace or different political government practices. Yeah. So the ESG score of BlackRock has come under big scrutiny lately because

essentially BlackRock has refused to vote on and confirm a bunch of these projects that they've been presented with to finance. So let's say I'm a liberal activist organization trying to advocate for some kind of lower carbon emissions

in factories in Illinois or something. And we need a lot of money. We come to BlackRock for the financing of it all and to kind of manage our assets for that project. BlackRock can refuse that project. That's just a decision of the board. They would decide, okay, we don't want to do that project. But people are sad about that because their big ESG related projects are not getting the financial help that they

want. And BlackRock is refusing in a lot of cases to do this literally just because the proposals they're getting are shoddy. And so in the past, they have been more like Fox News will bash BlackRock because they're quote unquote woke because they in the past have supported these ESG campaigns and things like that. But in last year in particular, I think they only voted through 7% of the ESG proposals that were given to them. And the company literally just came out and said

it's because the quality of the proposals were bad. Like they weren't good projects. You know, it's not a safe investment. Fair. Right. BlackRock is huge. They're all about risk management, right? They're not just going to throw their huge resources behind whatever whim they want to.

They need things to be pretty good bets. Do consumers, look at the ESG rating? Like, what does the ESG rating affect? Virtue signaling, nothing. Really? Basically, it is pretty fictitious, actually. Larry Fink came out and said himself, I'm going to just stop using the term ESG just because I think it's divisive and unhelpful. So it's just like, it doesn't actually have any stake in anything? Not really. I mean, it means that liberal organizations will look at, like, they can look at Black Rock's ESG score and be like, ah, we don't want to work with them. And, you know, same thing with Republican organizations can be like, oh, BlackRock's ESG

scores, da-da-da. We don't want to work with them or we do want to work with them based on that. But who cares if you want to work with them if they have all the money? You know what I mean? They do have all the money. So like why does it, I guess they are they above the ESG rating because they're so big? That makes sense to me. Kind of.

Here's the thing. They are so large, it would be very hard just to do away with them just because their ESG rating is not what people like. Oh, that makes sense. And, yeah, after Fing said that the term ESG has become like, divisive really to use. The company has lost about $4 billion in backlash related to ESG. Oh, actually?

Yeah. Which to them is actually almost nothing. It's so scary. Yes. Just for context, Larry Fink himself is worth $1.2 billion. He's a very wealthy man. That is a lot of money. It is a lot of money.

Let's talk about Merrill Lynch and that whole business. Merrill Lynch does not own Black Rock. It's another thing where Merrill Lynch has a representation on the board. of Black Rock, just like Black Rock, more than likely, I didn't check this, but it's almost certain to be true. They have representation on Merrill Lynch's board. There are these huge banks, huge financial companies that all just, you know, they all kind of mingle together and have say and what each other does. Are they running the world? I mean, it depends on how you define running the world. They're trying to make money. I don't know how I would define running the world.

They're trying to make money. I don't think there's any like deep state, weird political stuff going on. It's just like they're they're businessmen, right? They're trying to do what's best for their business. And another reason that BlackRock has come under a lot of fire is because they have been, well, Congress was investigating them last year

because there was reports that they might have been essentially investing in companies in China that are producing things and are counter to American interests, essentially, which is kind of a complicated problem

because Black Rock is, they have offices in like 30 different countries. It's an American company, yes, but it's also an international company. Right. It's more of a globalist organization. Exactly. And so to look at the way that they're moving their money around and being like, oh, this is against the U.S. Well, they're not just trying to protect the U.S. interests.

Right. It's part of what they're trying to do. But essentially what happened is about 400 million-ish, a little bit more than that, dollars of U.S. client money that was entrusted to Black Rock. Right. was invested in Chinese weapons manufacturing and other industries that are against American national interest. I can see why this would maybe spark some anger. So the People's Republic of China, the People's Liberation Army or whatever they call it. I forget the name of it.

People's Liberation Front or something, the Chinese Army, they have companies that are owned by the army that pump out weapons. and it just so happens that they can be good investments and pretty profitable, and BlackRock took advantage of that and invested some money. And so people were really, really upset about that. And I can see how that would become very quickly into some sort of conspiracy theory. Yes. Whereas probably the real story is that they're approaching money as an amoral thing. Like, money is meant to make more money and they don't really care about the morality of it, which is bad. That objectively is bad, but it's not the same sort of, like you were saying,

deep state conspiracy thing that people are really latching on to. Yes. And I think you hit the nail on the head, right? These people, these, like Larry Fink,

the other guys that are running these huge companies, they're not like, like they're not like priests of a religion, right? They are businessmen trying to do what's best

for their business. And they're good at it. They know how to get around things, how to, you know, how to accomplish their aims. And so the other thing is when Congress investigated this

and found that it was, in fact the case that they invested in in Chinese you know weapon manufacture those kind of things you know BlackRock is has access to the best lawyers in the world so they're you know they're going to get out of it right they're going to find a technicality they're going to find a way to

you know to kind of squirm their way out so any while they might desist from this kind of behavior because it's bad for business right to say that really anyone can push them around is not true is kind of silly but also So, you know, we look at it.

Oh, is there something to be afraid of that they can't really be pushed around? I don't know. They're always going to chase the dollar, right? And we'll just briefly mention the housing thing because I think that's important that people are, you know, if people are concerned about that. It is not true that BlackRock owns houses, you're right, but they own many shares in companies that do finance mortgages. So it's kind of a trickle-down thing, right? these companies that provide mortgages are heavily affected by BlackRock. And there is, I think, a pretty, there's an economic argument to be made that there is,

at least the risk of kind of price gouging and mortgages being overly expensive for people to buy homes, because one company is kind of not quite monopolizing because they don't own all of it, but owning a very, very large majority of kind of the new homes, smaller homes that are being put out. So, yeah, that's what I have for you. That makes sense to me. I feel like they're definitely, I can imagine why people will be afraid, but I can also imagine a more level-headed approach

that just says, like, this is what happens when companies have a lot of money. And, I mean, we've seen how that goes. Yep. It can be bad, can be good. Well, I think it can mostly be bad. I think, no. We don't have to get into that, though.

We just have to get into the facts. And the facts of the matter is Black Rock exists. It's big. It has a lot of money. The guy that tried to kill Donald Trump. was indeed in a Black Rock commercial. But I don't think. But I don't think we need to make literally anything of that.

Yeah, that feels like a real stretch now that we've actually talked about what Black Rock is. Yeah. I don't think, wow. Anyway, are we ready to give it a grade? I think so. Okay. Three, two, one. B minus B.

It did okay. It was fine. Not as bad as I kind of was maybe expecting it to be, but. I feel like I got some info from some people who are really, really passionate about this, who maybe are a little bit further along in the conspiracy theory than I personally would like to be. But I actually think there's a lot of truth in. conspiracy theories that you can take out.

You can take out kind of foundationally what they're building off of to reach these crazy conclusions. Crazy not being incorrect, but crazy being maybe unforeseen, confusing. I think that that can be helpful in actually learning about things, but obviously you're going to get some things wrong. And not everybody has Garrett Goolsby to then correct them as they bring their conspiracy. It's why we do the show. It's why we do this show for me and for everybody who decides to listen.

So hopefully people like me learned a little bit. little bit about Black Rock. And if you're any way on either side, extreme, good for you. Keep on, keeping on, but we can't, we can't join you in that journey, unfortunately. Thanks so much to everybody who tune into the social mediators this week. I'm Jillian. And I'm Garrett. And we'll talk to you next week.