Addressing the Blackrock/Vanguard Situation
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- Опубликовано: 14 сен 2023
- Some online are claiming that Blackrock, Vanguard, and other massive asset managers secretly run the world. Let's look at the evidence.
If you'd like to support the channel, you can do so at / theplainbagel :)
DISCLAIMER:
Richard does not have a position in Blackrock or Vanguard.
This channel is for education purposes only and does not constitute financial advice - Richard is not responsible for investment actions taken by viewers. Please seek out a registered advisor if you require assistance (while Richard is a registered portfolio manager at WDS Investment Management, he does not provide advice through The Plain Bagel, which is not affiliated with his employer).
People always want to believe a crazy conspiracy, but the truth is often far more boring
That pesky pattern seeking brain, trying to operate in vastly complex systems.
It's like a saying I heard a while ago: "Everything is a conspiracy when you don't know how anything works."
It's just the natural extension of the fact that the rich truly have more power than the rest
That won’t get you on the jo Rogan show or views
its not a conspiracy , they openly tell u what u think and want u can and cant do . dho
My problem with ESG is that it's essentially a corporate virtue signal in order to avoid government regulation. Like hey guys, trust us we can govern ourselves. You don't need to intervene with any sort of government regulation
Still better than literally no fear of government regulation which is what conservatives want. If there is literally no pressure they don't even have to pretend.
internal policies that prevent and offset emissions are a lot easier to implement and more effective than things like the EPA trying to clean up after entities that just externalize their environmental footprint and lobby for the idea that they didn’t cause it or it doesn’t exist. litigation takes the place of mitigation, and then when the mitigation and cleanup measures finally come, they tend to be more expensive- not only financially, but materially, because the ecological damage is already done by the time courts hold companies liable and allow them to proceed. The domain-specific operational changes are cheaper, they’re just harder to manage and enforce because there aren’t any one size fits all solutions, and the best way to mitigate the effects of your operations depends on how you operate. that problem presents itself whether you’re Blackrock or the federal government, and i’m not sure that the way to handle this is to try to codify every possible contingency so that it can be enshrined in law, because that kind of rigidity historically just allows companies to argue in court that antiquated laws simply shouldn’t apply to them.
Which is ironic that it's Republicans that are complaining about it since they're the ones who wants a "small government", ie less governmental regulations.
to be clear i’m also not sure the Blackrock approach is better because it seems patently absurd to me to try to develop a single instrumental framework for measuring how green every company is, that just seems like you’re _begging_ for proprietors to try to maximize those metrics without actually offsetting the material cost of what they’re doing
I don’t know what the hell the point of these stupid numbers is supposed to be if they’re unitless and can’t be compared across industries or even across competitors in the same sector
but somehow i doubt that any regulator serious about modernizing this kind of thing is going to care what Blackrock says it’s doing beyond Blackrock claiming that it’s been defrauded by people misrepresenting how sustainable they are
@@flight_risk I think you are talking past my point to another issue altogether. I mean, good defense of your perspective, but my one and only point is that ESG is a fig leaf for deeper systemic issues.
ESG is heavily driven by senior leadership's drive to have a check box management system.
Why'd they rebrand it as DEI regulations
@@alwayshere6956People are pushing back, but divide and conquer tactics would enable them to dismiss critics as "evil racists / sexists."
If I have a problem with companies that are going green, but not with diversity, now they've cut the dissenting voices down by probably half.
@@Excalibur2 Carbon emissions are a lie
@@alwayshere6956 They didn't. DEI has a completely different focus from ESG. DEI is about respecting people, ESG is about respecting the environment. The only real overlap is that ruining the environment tends to harm poor people the most, and minorities are disproportionately represented among the poor.
Different programs, different goals. Fox News may be equally hateful of both minorities and the planet, but that doesn't mean everything they hate is all one singular ideology. "Woke" is just a bogeyman word used to scare you, it doesn't actually mean anything (to be more specific: It has a meaning, but Fox and similar propagandists have intentionally stripped it of its original meaning so that they can apply it to anything they want you to fear and hate without questioning).
@@altrag ESG stands for economic SOCIAL governmence. I'm not sure just how God damn uneducated you think people are. If you are paying any mind to the world economic forum, if you're paying any mind to the Uniparty, then you're vastly unconcerned with what mainstream media has to say, be it CNN or Fox news. They are trying to make out the vaccines as a bioweapon when in reality the covid was a bioweapon. FAANG tech companies are complicit in government censorship, Twitter/X is hardly out of the forest yet.
It's important to point out that a 5% concentration can be extremely powerful depending on how pulverized voting is/shares are. BlackRock and Vanguard also have another effect which is passive influence: investors look at what they are doing to make their decisions, so they also have a lot of marginal sway that isn't directly under their control but moves with them in a wave-like effect.
It's wrong to say they control the world, but we also have to be careful to not understate their influence. And I don't mean this as ESG or any other policy specifically. It's simply a worse outcome for the whole world to have this much capital concentrated.
This factor out the factor of founders rigging the voting rights 😂
Buddy, Blackrock literally convinced Disney, a family focus company, to go pro-lgbt and lose money. How can you still think they don't hold any power?
Pulverized, lol
This happens all the time in the market, especially if you're an efficient market theorist. Look at any stock explosion or implosion AMC/GME/BBY/literally thousands of examples and they're moved by a small minority of actors which the masses mindlessly follow. Don't discredit the amount of power that 5% is when everyone else is fractions of that.
Just say you didn’t watch the video.
I would like to see you talk about that image with a few corporations like coca-cola, unilever etc and how they "have all the brands" to see if they really own everything
Their case is really just diversifying making sure they have multiple faucets since at some point their markets become stagnant for there is a limit as to how much consumers would consume their products.
@@chrisc5991 true, but there is a criticism on how only a few companies own everything. Would be interesting to see how true that is
" like coca-cola, unilever etc" - those trade names should be capitalized... just sayin', unless you have a hidden agenda. ;)
@@raylopez99 hah, i didnt, but good point
It would be interesting to see how they present the illusion of choice. Is it a smart marketing strategy to have more brand names with the same parent?
I will often try new products from brands I don't recognize and when they're indistinguishable I am just as likely to choose one over the other. In that case, the company with the most brands wins because of a higher random chance.
What is concerning to me, is that they are en-masse buying large quantities of properties (especially single family homes). They are a large part of why we are currently in a housing crises. If they continue to buy at the current rate they’re buying properties right now, within the next 10 years will own over half of all single family homes in the country. That is scary for me.
Didn’t you listen? There is nothing to worry about, everything is fine
Yeah, I'm kind of surprised that this topic isn't even covered in this video. The housing market is absolutely hosed...
You're probably thinking of BlackSTONE, not BlackROCK. These are two distinct and separate entities, despite the fact that they have similar names.
@@yaitskov1 and who says black stone isnt owned by BlackRock
Welcome to capitalism
They do not own that money, but still they are the one who can attend at board meetings and vote.
You missed one point in this, Direct Lending. Blackrock and Vanguard control a substatial portion of institutional direct lending. Their seats and the board, combined to controlling access to the lending businesses need, means they have an oversized influence on companies. Regardless of how a person feels about the initial Budweiser situation, that was a direct result the company needing to maintain compliance in order to maintain access. to lending. This falls back to the need to reimplement the Glass-Steagll Act to remove banking type operations from investment firms.
Anecdotally, I've yet to meet a person who actually knows what ESG values are. As someone who has studied their market and regulatory framework, it is not surprising that most people are incorrect in the assumptions about what ESG is. That Globescan paper survey, was useless because it did not ask people about what ESG states as their goals, but about people's desire for environmental responsibility in companies. Just peruse the top rated ESG companies and the majority are not environmentally responsible, in fact many have outstanding litigation against them for environmental issues.
You’re correct, I think he got paid to make this video.
He is just another Canadian. Very sheepish. Goes along with what he is told, etc.
Thank god you were able to say it so eloquently
Direct lending is only for private companies though? All others are owned via equity, not debt - and any fixed income security also has to report the same metrics equity securities do, too
Also, no such thing as ESG values, only non-financial investment materiality. The news has brainwashed everyone into thinking it’s the same as values-based investing, which is something completely different
The music mix on this video was fantastic. Especially the little 3-note stab after “If you own a Vanguard fund . . . congrats, you’re one of the puppeteers.”
for sure
I think the issue is what Blackrock etc. do with the voting power from clients money, and how they actively influence companies on matters like ESG that you mentioned. It’s a real issue but perhaps overstated by some & ignored by others.
Yup. A complicated issue that's completely overblown in areas it doesn't need to be and overlooked in areas where the issues usually originate. It's all the media game though. Anything that resembles fixing requires effort and persistence, it's not fun and exciting it's audits and compliance checks as usual lol
Especially given that they assume the political persuasion of the people money they have been entrusted with
@@Sam-ir2te Good point
There’s a real issue of using their vote to get a company to take an action that another Blackrock holding can exploit. Say retailers dump their real estate holdings for liquidity for shareholders and then an Blackrock company buys up that real estate and rents it back to the retailer. Moving as much money as possible back to the 1%.
That’s what I think is likely their real Machiavellian machination.
It's not an issue whatsoever
The problem with ESG is it is a basket of totally unrelated concepts some good and others absolutely not good all thrown into the same basket and used to try to generate some kind of social credit score for businesses. People have a much bigger problem with the DEI component of ESG than the environmental stuff. And almost nobody has a problem with the much more reasonable governance stuff.
One of jack Vogel's last pieces of advice before he died was beware of vanguard, blackrock, and state street. Index funds were his gift to the middle class but the influence these companies have because of those funds cannot be denied.
they dont own your share ownership in the companies tho.... people just like conspiracy. if blackrock goes bankrupt tomorrow you still got your shares. we live in a populist world.
@@ricardodelacrvz1400 all that money in assets? You don't think that translates to massive influence? Warren buffet was on an interview on cnbc and said he wasn't a fan of taco bell, their parent company yum brands fell 3% a few seconds later.
Thank you! You’re one of the few channels that actually explores the nuances of this subject.
Most people can’t do/handle nuance.
Some people are counting on that deficiency
There are no nuances, fiat owning socialists have us all under their thumbs consuming products that are ruining society.
💯
@@chowsquid I feel like Patrick Bet David is counting on that deficiency.
There is no nuance, ESG induces capital loss to the shareholder which is the liability of the fiduciary of those indices (vanguard/blackrock). Plain Bagel is a proponent of ETFs and indices, which as it turns out are not as passive an investment as previously purported.
STOP BEING SO REASONABLE ... you're dousing my outrage 😂😂😂
Good job as always 🤩
Just wait till Crypto Season starts again.
@@johnsmithe4656 True - I'll fan the flames quietly until then 🤣
I can't believe that the plain bagel has been targeted by Blackrock and Vanguard and was forced to make this video 😢
Lol oh no they are controlling small RUclipsrs now…
What makes you think they were forced? They're backing the winning side.
@@itscrispy4469 Of course they are. 800k subscribers isn't small and pushing propaganda through television isn't effective anymore.
@@domsanchez148or maybe he’s telling the truth and you guys suck at seeing how boring reality is
im in your walls
@@domsanchez148
The multiple layers of obfuscation exist by design. At the end of the day they have influence and more influence than a private group should have over such a large proportion of the economic liquidity.
If you bother to look into the percentages of which they own companies, it is often 5% or less.
Not to mention this assumes 1:1 voting rights, which often isn’t the case as often the founders of the company deliberately stack the voting rights towards themselves far over the percentage of which they own the company.
Not his fault you are financially illiterate.
your favourite Fox News, owned by the Murdoch family, have 39.4% of the voting power despite owning only 14% of the shares 🤫🤣
If you want a master class in voting power obfuscation, look up the Lee family’s control of Samsung. Absolute art if it wasn’t so dystopian and late stage capitalism.
How robot Zucc has rigged it for himself is pretty funny too if it wasn’t so dystopian either.
Blackrock and Vanguard don’t control shit.
Good, let's go socialist and nacionalize everything then!
@@lubu2960"got a bad cut on my leg, better chop the whole thing off instead of using a bandage!"
@@lubu2960 what are you, 13?
Really appreciate you coming back to this in long form. Too nuanced for a short, getting into the nuance in an approachable way is really your wheelhouse.
There is no nuance, ESG induces capital loss to the shareholder which is the liability of the fiduciary of those indices (vanguard/blackrock). Plain Bagel is a proponent of ETFs and indices, which as it turns out are not as passive an investment as previously purported.
A long bagel is just a baguette
@@lephtovermeetthis is the hottest take 😂 😂😂
ESG is almost entirely government manipulation. I work in a private equity firm and we are forced to incorporate ESG policy because some of our largest investors are state pension funds, Union funds, etc. it’s a backhanded way for government to control businesses and thus control consumers. Also, the threat government regulation over businesses not considered ESG compliant shapes the way we invest.
Bingo
Yep.
these company do not dictate the board room but having substantial/sizeable share by single entity/thought process will govern the direction
You seem to oversimplify ESG by just covering the E and ignoring the SG.
The G is related to corporate governance not actual political government lol. And the S is usually related to health & safety standards, labor standards, community impact, etc. they’re not going to force your kids to be gay or tell the government to ban straight men like so many people think the SG is related to lol.
So every company just went full nuts and started acting trans for no reason?
@@caseyvidrine3189when conversation in contemporary culture explodes and makes topics unavoidable, companies have to pick a side, and they’ll always pick the side that makes them look more virtuous.
No, they did that because their ESG score is what lending is based off of. They’re forced to pick the freak show side because if they don’t, they can’t get financing. That’s why they’re powerful.
@@caseyvidrine3189what exactly does “acting trans” even mean? Are you even old enough to work at these types of companies? I happen to have a white collar job in consulting, and people don’t “act trans”. A simple acknowledgment that trans people exist and should be treated as human beings isn’t some radical idea. You know how much that effects my day to day work? Exactly zero percent. The lot of you need to grow up, it’s exhausting.
The truth is often boring, and unfulfilling to those who feel they've lost a grasp on their life...not saying that there arent powerful people in this world, but more often than not peoples actions are just a result of their self interest (ego, greed, jealosy, etc.).
Thanks again Plain Bagel for simplifying difficult subjects!!
@@chelseachelseafcsuperfan7220 You're wasting your time to trying to convince anyone here. These people are weak. They don't want to believe evil exists because if they accepted that evil exists, then naturally they'd get that feeling that they have to do something about it, right? Well the problem is that they're incapable of doing anything, they're completely useless. So they'd just feel super guilty about it. So instead of feeling that guilt, because that would be SO painful, they just deny reality.
@@chelseachelseafcsuperfan7220You’re a genuine moron.
@@tinymike318 or maybe you are brainwashed.
@@shaunsensei6948 Nah you’re upset because I hit a nerve.
Today's episode is brought to you by...Blackrock.
BlackRock CEO Larry Fink’s statement in 2017 during an event where the executive admitted that the firm was trying to “force change” in companies.
“Well, behaviors are going to have to change, and this is one thing we’re asking companies. You have to force behaviors. And at BlackRock, we are forcing behaviors,” Fink said.
“We added four more points in terms of diverse employment this year. What we’re doing internally is, if you don’t achieve these levels of impact, your compensation could be impacted. ... You have to force behaviors. And if you don’t force behaviors-whether it’s gender or race, or just any way you want to say the composition of your team-you’re going to be impacted. ... We’re going to have to force change.”
Eugenist robber barons.
This video: “Blackrock clearly isn’t trying to force ESG”
CEO of Blackrock: “We’re forcing ESG”
He is in the industry, of course he have to defend the big bosses.
Fink is a jew too.
This dude struck me as a spineless bootlicker, then I thought otherwise, and _then_ he dropped this...
Larry literally said behavior has to be forced.. I'm sure he'd never do it though.
Please lay out some ways he can “force” the desired behaviors. Larry can talk and does but what can he actually do?
@@seanknox7321lol. You guys are funny.
"What can he do??? It's literally impossible to enforce!". Good joke
@@seanknox7321 It has already happened. This is why there is so much forced 'wokeness' in western culture, western entertainment, and megacorp. Typically it is all done to comply with ESG, CSR, etc. Seen companies I used to love turn to crap ever since they publicly announce they are complying to the 'S' part of ESG. Companies discriminating against demographics through DEI-initiatives is usually also to comply with the 'S' part of ESG.
Hes not wrong. Behavior has to be forced when it comes to any gargantuan entity.
Man, these comments are about to get absolutely terrible
Burning hell hole
*under construction*
He addressed the ownership, the voting, the agenda and its power and potential yet you hear it over and over again.
Wait until they start pointing out the obvious to which so many are oblivious.
@@thebarkingsnail pointing at the obvious usually gets you flagged for hate speech...
@@assortedsubscriptions4012 Or… maybe what you think is ‘obvious’ is actually just factually incorrect hate speech.
@@GimmeACiggyYaGronk the ADL has labeled you a "good goy" - wear it with pride!
Here is my problem with ESG..How the hell are cigarette and oil companies allowed in the ESG fund and not company’s that have influenced entire industries to become more environmentally conscious?!? If there is a company out there where their sole goal is “to advance the worlds transition to sustainable energy” and they are not added to the ESG fund it shows they are just a fluffed up name and in my opinion fraudulent.
Yes im talking about Tesla and I know they were added May 1st 2023 but why did it take so long? How many times was ESG publicly called out on this before they added it? How minuscule is their position compared to what they do? Why are oil and cigarette companies still in ESG?
@@clam_baked Also what right do they have essentially extorting CEOs for certain "behaviors" with our 401k Pension money. I dont see this being addressed. The problem is they have easy passive low margin ETFs because they are so big. These companies need to be broken up. This is EXACTLY what anti trust laws are for.
Cigarettes is fucking bs but oil could be allowed because of the amount of money they have meant they could transition to other form of energies. We actually already see efforts of them diversifying toward renewables. They potentially have more impact for more sustainable energy than some poor companies that try to grandstand without any capabilities
ESG is the epitome of green-wash virtue signalling.
unfortunately yes, that is how most companies use it.@@ninakore
This video glosses over three things:
What exactly esg scorec are determined by: The Social part (aka pushing lghdtv+ things) gives much more and also faster points than taking care of the environmental issues, causing things like the budlight thing. Or tesla having a lower esg score than cigarett companies.
2. Aladdin: Blackrocks stock rating system, that is also used by outsiders and with ~21trillion under the softwares management. It uses the esg score in the price determination so a bad score imideatly reflects on the stock price of a companie.
3. Blackrock and vanguard issuing recomendations for who is to be hired as executive to increase the esg score. This brings the idiology much deeper and mote direct into the companies than stockprices ever could.
Why do you losers love losing money? Who gives a shit about the "whoke" agenda ,inclusivity is clearly profitable lol. inb4 'but what about target and bud light!!!1!" my brother in christ you boycotted one of their brands and just chose to skyrocket the other
Guess Blackrock now owns Plain Bagel
What's plain bagel's ethnicity? Anyone able to find out?
Sadly, you probably really believe that.
Great video! I really enjoy how you explain these situations.
Cut to shadowy character in an S&P meeting room, "It sure would be a shame if you got dropped from the S&P 500 index, wouldn't it?"
Monopoly busting time??
Theodore Roosevelt is rolling in his grave with thse modern monopolies.
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You are right.!
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I started paying more attention to stock and learning more about online trades
Trading became interesting when I met Shanita online and she gradually exposed me to the whole trade market and how to earn massively from it
Meeting with someone genuinely good at the financial market was a break through for me
Great coverage. Happy to see more light being shed on this subject. Too many opinions floating around that are just kinda silly.
BLACKROCK
It's not great coverage. Just because a video is long and filled with financial jargon doesn't mean it is nuanced. Considering that the premise of this video is the handwaving away of Blackrock's influence in the world, side-stepping their role in in the bond markets is lying by omission. During the housing bubble crash of 2007 the Federal Reserve was panicking and turned to Fink (a lowly hedge fund manager with a measly 7 trillion dollar fund at the time) to create the Maiden Lane investment vehicles which resulted in defunct Wall St giants like AIG and Bear Stearns' assets being effectively placed under the control of Fink and co.
Fast forward to the 2020 crash. The Fed is in panic mode again because the corporate bond market was on the verge of collapse as no one was willing to buy up the debt of zombie corporations (Exxon Mobil, Boeing, Delta etc). If this bond market was allowed to fail these corporations would would not be able to fund themselves except by issuing more stock which would further devalue equities and create a death spiral. Fink once again saved the day by buying up this worthless debt and in turn the Fed would buy his ETF to subsidize him. So Blackrock is now effectively receiving newly "printed" US dollars buying his ETF making them so integral to the US financial system that Bloomberg called them the "Fourth Branch of the US Government".
This doesn't even get into the Blackrock's Aladdin system and how it's used by practically every single major financial institution and their fund managers.
It's also incredibly dishonest to misrepresent Blackrock's role in directing these companies to enact their political bidding. They may not have direct control over day to day operations but their controlling interest of 88% of S&P companies directly led to the mass implementation of their "woke" DEI policies. They single-handedly institutionalized blatant anti-white discrimination in their hiring practices. The result? Since 2020, 94% of new hires at S&P firms went to non-whites according to Bloomberg. Bagelboy is conveniently ignoring the numerous public statements Fink and his co-conspirators at Blackrock have made regarding their goals in disenfranchising whites in corporate America. He must be historically illiterate as well if he doesn't understand why Fink and his tribe might be motivated to do this.
Yea silly lol...
Wait, you're telling me the average tiktoker doesn't know how complex financial schemes work ? Color me shocked ! 😂
Even if they did, the real money’s in right leaning conspiracies. Juicy lies sale !!
Funny how she acts like it's some secret bit of info when you'd know how kuch reach Blackrock has if you just trolled through Wikipedia pages for suffering major businesses and looked at "owners", "investors", or "shareholders".
@@arthas640 well the thing it is secret knowledge for tik tok user because well they don't do anything other than scrolling the whole day.
The intentions of ESG are noble, but the effect is that the people controlling ESG incentivize agendas they like and punish agendas they don’t. The problem is that ESG scores are inherently reductive and in many cases incentivize behaviors that are bad for the environment, society, or governance. As an example, ESG’s preference for low-density energy sources like wind and solar over nuclear power belies the reality that nuclear is far better for the environment than any other practical source of baseline electrical grid power. As another example, GMOs are penalized vs organic crops, even though GMOs are in many cases equivalent or objectively superior to organic crops environmentally.
Diversity quotas in boards are another example; incentivizing companies to select board members for their immutable traits is creepy and wrong.
lol the ad interrupting this video was for Vanguard!
To highlight a few major points,
1. Being the biggest shareholder is a big deal even if they're not the majority shareholder AND Blackrock has been leveraging it.
2. Retail investors just can't organize themselves well to sue a fund manager even if they technically are the owners.
Any time you watch the CEO of these three companies they talk about forcing the hand of other corporations for ESG goals. I will believe their words like that when they come out of their mouth
"I will believe the CEO when he says something that aligns with my narrative"
Why would you trust the CEO of an investment firm bragging about how much influence his firm has? He is very obviously playing this up to appeal to potential investors in his own company by going "hey look if you give your money to me I'll get the companies to do what you want".
@@hedgehog3180 when they lay their plans bare like that, its hard to not take it seriously. Anything else they say though take with a grain of salt.
Because thats not what people want. It runs directly against the majority, which does not in fact want forced diversity and inclusion pumped into the comapnies theyve invested in@hedgehog3180
@@kagakai7729 You are quite literally rejecting "coming from the horse's mouth" because you don't want to believe it LOL
"Guys they only have like $2-3 trillion in actively managed funds they can influence companies with, not $7-10 trillion. It's no big deal."
They are the main shareholders in every major company in every sector on the planet.
I'm assuming the move towards ESG is also due to new EU sustainable finance regulations that require banks, funds etc. to e.g. make sure that customers are explicitly asked about wanting ESG-focused solutions first, before offering anything else. The move might therefore be in anticipation of this regulation becoming standard around the world in the future. If you are looking into a video topic, do consider taking a closer look at the EU Sustainable Finance framework and the EU taxonomy for sustainable activities.
Indeed
What the heck is going on…? I’m losing my mind. The point is *not* ESG, are you people high??
The point is that wealth is insanely concentrated in the hands of a handful of individuals!!! It literally doesn’t matter what their investment philosophy is, they have an absurd and unprecedented amount of power!
The systemic societal risk due to the potential for bad decision-making by unelected bureaucrats and corporate executives *is the problem.*
The throne is built, it hardly matters what conspiracy-of-the-month portfolio they operate.
Hasn't the EU had enough of falling behind the global growth curve yet?
@@IFRYRCEis growth everything? Where has that gotten all the countries to have most recently topped the growth charts? Many have come crashing down or are teetering on crisis for neglecting other priorities in the name of growth statistics.
ESG is financial wokism. Won’t solve anything but will put unaccountable entities in control of how companies are run
It feels like the argument is 'The investors could stop them, so they're not really controlling anything." here. People's approval for the idea or even specifics of ESG may easily come from them being unaware of aspects of it. Neither of these seem to address the negative claims made about ESG and don't prove that Blackrock and Vanguard aren't pushing an agenda.
did you really watch the whole video lol?
@@TheInfectous Yes. So you can tell me what I've missed.
@@TheInfectous逃げんなや
What I like is that you cover where I situation is placed right now, in the moment. You don't spin out much of a future. Sometimes we can follow things to their logical conclusions but you opted to let the audience think for themselves as much as possible. You're also upfront about where a lack of nuance is in your own content. I think that's fantastic.
My problem with Blackrock is more on the side of them trying to trendset. The thing I've found that is a massive blackhole in investment. The Dot Com bubble and how it was taken advantage of, Enron, and even Theranos.
If you make something appear popular to an investor or investment group, they will chase the cash cow for all eternity. That's their job. The flaw is that, even if the Public at large is not interested, it then makes it appear that they're pushing an agenda. They are, but it's for M O N E Y. They don't always care about these values at the top even if they hire so called "activists" or "ideologues."
Many big companies started taking the opinions of Twitter and thought that was a reflection of reality. That may turn into some very self destructive actions in the not too distant future. SVB, we salute your terrible outreach.
Fink is trying to do the same with ESGs and his marketing and methods are terrible when outsiders look in. It is utterly out of touch and godawful. I cringe watching it.
So shadowy intentions or not.... it might turn into a big problem, very quickly.
The messaging is bad, but the political risks are not huge and this is very different than SVB.
When focusing on conspiratorial idea, focus is taken away from the very real problems that large investment companies cause. Companies like BlackRock have been buying up property in many European cities and raising the rent significantly. This affects real people directly. In Denmark we used to have laws regulating who and how one could own homes. These conveniently changed and the new investors have been raking in cash since.
Investment companies have a strong incentive to to change markets to their advantage and changed laws in Europe often seem to favour their interests.
Excellent and balanced perspective. Loved it
Wouldn’t trust those studies on support for ESG. 9/10 of people will always choose a higher account balance at the end of the day than to knowingly invest in underperforming invests that call themselves “green”
I would need to read those ESG studies, but my gut feeling is they are probably highly suspect. Just from what you presented, none of them seem to be directly referencing ESG, nor the most controversial part of ESG (forced diversity at the expense of merit). We have to remember these kinds of surveys are easily manipulated by the wording of the questions, or even the order in which the questions were asked.
Note that he boils down the entirety of ESG to ‘environmentalism’ and ‘sustainability.’
Almost like he’s trying to sneak past the rest of it.
@@blaneb8879 ‘environmentalism’ and ‘sustainability’, the ones where actual short-term sacrifices have to be made for long-term sustainability, rather than paying for some diversity hires or czars and sensitivity training, which is really just a way out without taking actual responsibility for sustainability.
Nail on the head.
Always love the plain, cold and objective financial truth. As a CFA candidate, this is very well made
Here is something to think about. This guy works for a company that black rock most likely has stake in . This guy if black rock offered him a position he will take it . There s no way he will speak the truth. For example ESG is bullshit. Telsa has lower ESG score than all the oil companies. Explain that logic .lmao😂
There isn't any certainty when money manage can go bankrupt in a snap 🫰
So you don't hold a CFA....."CFA candidate" is such a cringe label to give yourself lol
@@DevinRitroskyTechnicaly he's correct. I'm an actual investment licensed Financial Advisor and CFA candidate is what it's litteraly called when you are in a professional designation program. It's not some cringe name he decided to call himself contrary to what you just said.
@@Lazaven using "CFA candidate" is just saying you have the credibility of a student. There are many CFA candidates, few CFA holders.
this video sponsored by BlackRock and Vanguard 😂
Yea I just lost a ton of respect for this dude lol
BlackRock doesn’t need strong leverage to influence CEOs or companies. Just a little bit. A little inconvenience in the fast paced world of C suite is more costly to decision makers than simply complying. Same principle applies to minority ownership. It doesn’t matter that BlackRock has a minority stake because it’s large enough concentrated in one entity.
The proposition that a company with tiny shares (most of which are passive investments on behalf of their clients) in a bunch of companies can somehow concentrate those hodgepodge of shares into decisive influence - all simultaneously and without being watered down by the millions of other factors and shareowners- to influence the economy or world is ludicrous. You're assuming that somehow Blackrock is this illuminati legion of doom that has the intelligence and administrative power greater than any AI or government in human history, rather than thinking that maybe, just maybe, the people telling you they rule the world are full of sh*t and are taking advantage of your gullibility for views
Gotta protect the machine if one wishes to earn within the machine.
The Norwegian Sovereign Wealth Fund who own 1% of all global stocks does the same thing but the grifters and those who know nothing about finance didn’t tell you to hate them….
Don’t lock yourself out of accepting a good argument
The title makes it sound like Bagel is making a RUclips apology
*Today's sponsors, Blackrock and Vanguard*
Larry Fink no longer even uses the word ESG because ESG equals lower returns. If you want less money for your investment, so you can tell your friends “I saved the world” I want nothing to do with it! As for BlackRock would never get rid of shares or dump shares of a company is also an insane take. Consider Tesla a company that builds zero emission cars and yet still gets kicked out of the S&P. The moral of the story yes BlackRock and Vanguard are monopolies, and yes if you do fail the ESG index you will not be in the S&P for very long. So much for passive investing….
P.S. Just because you throw billions of dollars at bad ideas doesn’t turn bad ideas into good ideas. The fact ESG is being used for retirement accounts means millions of the people will likely have less money when they retire in the future. You can take that to the bank!
Thank you for making a longer video about this. This covered the main concerns about this topic. I saw the short and was really disappointed.
Thanks for this video. Keep hearing from people around me who don't invest talk about stuff like this.
"Secret puppet masters" and in the next sentence: "If you look up the top shareholder for that company". So not that secret.
It's how you know it's bullshit
At the risk of over simplifying...
ESG regulations + social credit + digital currency = massive government control over dissent ⚖️
I remember Lefty RUclips channels lamenting the Chinese social credit system 8 years ago, suddenly being concerned about it is an "alt right conspiracy"
@@evanplanas7505that’s because our understanding of the “social credit” system was incorrect. The concept as it is often referred to is horrifying, but also not entirely reflective of reality, which is a lot messier and conflates a lot of separate things. This is not praise of the Chinese government in any way, but to criticize an authoritarian government you have to be willing to admit when your info wasn’t accurate.
@@namingisdifficult408 how was the info not accurate?
There's always a potential risk in business in general so in all you do have a better understanding of what you're getting into beforehand
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More than 5% is considered a Majority, not minority shareholder legally. But you're right that their influence on Company's decision is limited to the number of Board Seats they hold and able to influence. In reality, most Executives will be pandering nervously around to their wants and needs, just ask any of their employees.
ESG is the organic label of investing. Guns, Oil, bad...labor exploitation? A-OK!
ethical labour practices is almost always the first thing mentioned when talking about the S in esg
@@_blueeyes lol, have you seen ESG prospectuses?
The great thing about ESG is it's so fuzzy. What does it mean? E or S or G and in what proportion? Who gets to decide?
just enough for you to taste it all, but not so much it's all that you taste
Nobody, and everybody. ESG is probably better seen as a statement of general intent rather than a hard and fast set of rules that someone's going to follow. And, of course, to make things even fuzzier, not everyone making that statement of intent actually intends to do what they say they will. :P
A lot of people see the whole 'you decide what ESG means, there are not hard and fast rules' thing as a bug (and in the sense that it allows for greenwashing, it absolutely is a problem), but I think on the whole, it's a feature. The finance industry as a whole seems to be very, very good at twisting the rules so that they can follow them by the letter while ignoring what those rules were intended to accomplish. On something like this, where actual legislation would give little to no benefit, it might be better to take away their ability to point to rules and say 'See? We're following them!'.
I appreciate your ability to break down these large economic news headlines and explain what each peice really means, as someone not well versed in economics it makes it very easy to follow along and understand.
This is by far your best video.
Have an upvote sir!
Great explanation. My main concern would be the possibility that, if either firm ever had a major accounting fraud scandal, the results would be far larger due to how much of the market they manage. I haven't seen anything that suggests accounting issues for either company, but after so many previously assumed to be honest corporations running into audit and compliance issues, it makes me wonder if any one entity should manage such a large portion of the market. How many books could a rogue Blackrock or Vanguard manager cook if managers did cook books?
Not fraud, but I have questioned if having an obligation to buy from a certain basket of stocks has created a feedback loop that pumps a certain basket of stock.
True power lies in who votes on the board of directors for the CEO.
The CEO can do all sorts of legal but morally dubious conflict of interest bs and get away with it under the law.
Kinda like we work.
The director votes that index fund managers have is valuable- and is often exercised in discreet ways not known to the ultimate beneficial owners of the stocks.
There are companies who commit multi-billion dollar frauds over many years, with "highly qualified and competent" board and committee members. Boards are questionable as protectors of investors who dont sit in the board.
True, but the real powers lies within the capitalism system itself.
16:36 "Substantial claims require substantial evidence"
The internet: We don't do that here
corporations having enough power to deviate the public discourse is never good.
Until critical thinking becomes normalized, there will always be someone with massive influence over people’s opinions. Better a corporation than a cult of some imaginary sky daddy, which is what’s been the case in most societies for most of human history.
Thanks for picking this topic, Richard, some very helpful clarifications! I learned more than I expected LOL. Always great content on this channel... Long live The Plain Bagel! 😃
As an aspiring CPA and CFE, Richard is one of two financial RUclipsrs that I pay serious attention to (the other being Patrick Boyle).
A very, very smart man!
Thank you for this video. Could you also discuss BIS and WEF in your future videos?
TLDR; it's a classic "agent-principal" problem, in that the agent (Blackrock) may not be accurately reflecting the wishes of the principal (the people Blackrock represent).
Thank you Richard for explaining.
As always, people take complicated topics and institutions and make monsters out of them.
It isn’t even that complicated 😂
At the same time, If a few hundred blackrock employees were murdered, we'd see widespread social effects.
Yeah there’s definitely not an anti-White agenda in the media or a push to feminize men or any sort of psyop, that’s just ridiculous.
My toaster burned my toast. That has to mean the home appliance industry wants me dead.
It's actually a good thing to scrutinize and want to change institutions that harm the general public...but you have to understand how/why it works first. Kind of like disassembling a device to see how everything fits together, then you can rebuild it better; a lot of people only know how to disassemble.
This reminds me of how there's a lot of blame on REITs for the housing crisis, even though its small landlords who have the most incentive to block new housing supply in the name of their 500% leveraged yolo.
But how do small landlords do that? I'm not denying the possibility that they have a role, but I also can't picture a mechanism by which they could limit the housing supply themselves.
There might be factors in local governments related to zoning that limit what developer companies can build. If the prices of land plots are going up too, then this further increases the pressure on what developers will build relative to decreasing profitability. Add to this the way the creeping Fed rate increases are changing lending patterns among banks for the terms they give businesses and consumers. There are probably more secondary and tertiary factors that I haven't thought of that seem to increase the ... influence(?) of small landlords
This is a relatively tricky thing to fully disentangle since the demand for housing is somewhat inelastic. Most would rather make significant sacrifices vs being homeless so they must rent regardless of the cost or try to buy. Combine with the narrative of "giving away your money" with rent or that "home ownership is the path to generational wealth" and you have relatively strong demand regardless of prices. At that point, even small changes to supply or corporate demand can have massive impacts on pricing. Even if corporate ownership or foreign ownership is a small percentage, the impact on pricing can be significant
I wouldn't try to just pass the blame to small landlords either. The average home owner also wants their home to appreciate because it is seen as an investment so they will vote for things to help keep their home value up.
@@SamAronowthey go to local city board meetings and complain about development changing the character of the neighborhood or worry about parking and all sorts of NIMBY nonsense.
While I view all massive institutions with suspicion, I always want to find the pieces of banality that are hidden in the conspiracies. Thanks for providing that for me. At least I can count on the Bagel.
Who controls the world then? Food for thought. Don't marry any source. Don't trust anyone. Collect and compare.
thank you for this video, I had no clue about how these asset managers operate!
You mean somebody is in control? That's such a relief!
I guess when there’s a power vacuum nobody seizes it, like ever.
The best part of Vanguard and Blackrock situation is the fact that a lot of government want them to be more active with the company they own because of how much ownership they have but they refused because they cannot do that because it takes too much time and resources to do that which goes against the philosophy of indexing in the first place which is to spent the fewest amount of time and resources to invest. They do still get involved in some corporation but it's mostly just some minor stuffs.
And yet the entire reason you invest with them is because they are supposed to manage it for you, i.e. be active, but all that entails is dumping it into an index and hitting the snooze button which anyone can do.
The whole thing is a farce. A couple of years ago, they were slammed for not being activist enough and now they're being slammed for being too activist.
@@sor3999 that's not why I invest in Vanguard; I like their passive approach.
@@sor3999 not for index investing
@@sor3999 It sounds somewhat like a waste money that could be better used for a smaller cheaper asset management firm
Yup, clarified! Always appreciate your videos
Thanks for this much more unbiased approach to explaining the matter
Don't buy ETFs or Mutual Funds if you want voting power. If you want voting power, buy shares directly.
Like people actually bother to vote in them 😂
Yes, my $5000 under management will really make my voice ring at the shareholders meetings...
Is ESG a gimmick used by Larry Fink to increase Blackrock's MER?
Yup
Excellent explanation that is much needed.
some circularity or feedback comes from pension funds that largely are for government workers, where the government's interest determines whether to stay with the fund or not, opening the opportunity for political influence on these firms' influence.
This video was sponsored by BR and Vanguard by the way, have a nice day!
If you bother to look into the percentages of which they own companies, it is often 5% or less.
Not to mention this assumes 1:1 voting rights, which often isn’t the case as often the founders of the company deliberately stack the voting rights towards themselves far over the percentage of which they own the company.
Not his fault you are financially illiterate.
your favourite Fox News, owned by the Murdoch family, have 39.4% of the voting power despite owning only 14% of the shares 🤫🤣
Zucc has 60% of the voting rights in Meta despite owning far far less shares, because he owns 90% of the non public Class B shares, which have 10x the voting power of the public shares 🤫😂
They don’t control shit eh.
@@ChineseKiwiblah blah. 0:45 "TOP shareholders in 88% of the market"
Bs it's only 5%
Why is the assumption that ESG is an accurate scoring system? "This company pollutes" and "This company scores poorly on an arbitrary scoring system that might be related to pollution" are two very different things.
I'd say most don't assume it's "accurate", but better than no attempt. Also remember the Environment is only one letter in ESG.
I feel like one of the main assumptions that these funds have no say on how money is allocated is similar to how corporations had no agency over bond ratings from Moodys, S&P, etc in 2008. I'm paranoid!
Thank you so much for this video. I actually tapped into this topic a little bit. A lot of articles/videos are quite conspiratory so i appreciate the insight from somebody trustworthy in the investing space.
yeah conspiratorial. cool term
It's a silly conspiracy theory until 20 years later it turns out to be true.
My god, it is futile to explain this to the average internet user.
Also, this Patrick Bet David guy is such a scammer
Thanks! It still does appear that State Street and BlackRock have more of a bias for ESG - while Vanguard and Fidelity seem to have less. I read somewhere that an officer at Vanguard said that they're only duty is to its investors, and has since adopted much fewer ESG initiatives. So, if Vanguard can do it, and they're seeing the same risks in the market, then that shows me that BR and SS are still using their influence to an extent. Granted, it's probably less than the hype, as you've pointed out, but it does appear to be one of their priorities.
All they really need to do is cater to their customers.
The people want ESG flavored funds, make some ESG flavor funds.
If people want non-gmo organic guns and ammo makers that like square dancing,
then make a non-gmo organic guns and ammo makers that like square dancing fund.
Vanguard and Blackrock we know what's up. Vanguard is Jack Bogle's company and he hates what he sees as predatory fees. Blackrock is run by Larry Fink and he thinks his investors can change company behavior to the better.
Seems like that's more just difference in how they view risk. BR and SS also pretty clearly state that their only duty is to investors. They are just taking the position that there is more risk to mitigate with ESG measures.
Maybe Bogle's soul hates predatory fees, but his body in stone cold.@@samsonsoturian6013
Superb analysis. Thank you.
This brings up my only complaint about ETFs. As an owner of ETFs, it is the asset managers that control the votes for the shares held inside that ETF. I don’t have any say, which I feel I should since I own the ETF.
Own all the shares in the holdings and micromanage them yourself then…Oh don’t want to? Then don’t complain.
I feel like you're really downplaying influence of those institutions. Their managers can vote trillions of dollars of shares however they want:
-ETFs are designed to be a passive long-term investment, for people who won't bother to track how their fund is voting
-they also won't hold managers responsible for their returns, as indexes are viewed as reflection of the economy or particular sector, thus it's government to blame if they go down
-fiduciary duty is a fiction - unless there's a really extreme negligence, managers can claim they have acted the way they have considered best for their clients, and it will be impossible to prove otherwise
To prevent undue influence I think either ETF managers should be forbidden from voting their shares, or forced to create a system for their clients to vote shares they proportionally own (and abstain from voting shares for which there are no instructions)
You have an informed opinion on 10,000 different stocks and have read each proposal?
You as the customer with the funds hold them responsible for returns - you can withdraw your money at any time via selling the ETF shares you own.
@@derek8315 No, I can vote on proposals I'm interested in, and abstain on others and let more active shareholders make the decisions. There's no reason to give significant voting power to random fund managers who don't actually own any stock, and their only job is to follow given index - voting shouldn't be a part of it.
@@ChineseKiwi Right, but vast majority of ETF clients don't care about how their fund votes, and just want to have their investment follow given index. If the same people owned shares directly it's safe assumption they wouldn't vote at all, and let more involved shareholders make decisions, so ETFs should do that as well.
This video is on point. I used to work from BlackRock and he makes a great point: these asset managers act as agents on behalf of their clients. Their clients are making the decisions to invest in countries, indexes, markets, themes, sectors, factors, etc. Also, a huge amount of assets are managed on behalf of big institutional investors like pension funds, insurance companies, etc. They don’t control them - that’s just nonsense.
It's kind of like how individuals have voting power with the government. I don't get to choose how the gov spends money (say money towards various forms of welfare), but I do get voting power that determines if the money is spent on homelessness or food for struggling, for example
This is why we need pass-through proxy voting for funds. It probably doesn’t make sense to allow fine-grained voting, like voting your Google shares within a broad-market fund. But you could select from preference classes, perhaps offered by third parties who post a transparent slate of votes.
I appreciate this explanation!
You explain this all VERY well, great effort!
I hope this video is as viral as other "influencers" that said blackrock and vanguard control america
It won't because tiktok does not like brains
That was really well done. You addressed all the points I had to argue against the premise. I was worried that you had been comprised.
Thank you, this was insightful
And now a word from today's video sponsor of the channel: BlackRock and Vanguard
For a really smart guy you sure are naive when it comes to these companies.
Would it be a surprise for them to deploy influencers to placate the masses? "Nothing's happening here. Just move on."