BlackRock inc. is the largest bank in the world. How big, you ask? Well, it manages an estimated total of $9 trillion. This corporation controls more money than many nations. The staggering amount of funds under its control has led many to suggest that BlackRock owns the world. The scary truth is, they kind of do. The decisions BlackRock makes with its assets have ramifications worldwide. The effects of those decisions could be and have been some of the most wildly felt financial events in recent history. So, why haven’t you heard of them? That, too, seems to be by design. Some claim that BlackRock is the world’s largest shadow bank. Regardless, the History of BlackRock and its position in the global economy is shocking.
What is BlackRock
BlackRock inc. is an investment management firm based out of New York City. The company’s primary focus has always been risk management. This focus has positioned it to not only be one of the lone survivors but the only bank to profit off of some of the worst financial moments in the past 50 years. The company runs multiple wings, including iShares and their hugely profitable Alladin software.
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Larry Fink
The bank’s founder Larry Fink has been working in the finance world for decades. Before founding BlackRock, Larry had worked for various financial institutions and rose to prominence for one noteworthy accomplishment. He invented mortgage-backed securities. Of course, we know how detrimental this financial device became, but at the time, this was revolutionary. The invention catapulted Fink to prominence. He enjoyed some of the best opportunities in the industry until he made a wrong choice on a fund and lost his company $100 million. He was immediately fired and blocked from the financial sector. But, in 1988, Larry Fink teamed up with a few colleagues to found BlackRock.
Growing into a Giant
Over the past three decades, the company has risen to astronomical levels. If the company’s asset portfolio were a nation, it would be the third wealthiest nation in the world. So, how did that happen? Ironically, the 2008 financial crisis and the 2020 pandemic put BlackRock in the position to become the largest bank in the world. Since it was uniquely positioned to mitigate risk, each financial crisis hardly affected the company. Other companies were lining up to have BlackRock evaluate and restructure their portfolios to withstand the coming downturn.
Moreover, when the US government began to strategize a bail-out program in 2008, they needed someone with a financial mindset to help direct the bail-out funding. Who did they select? None other than Larry Fink himself. That’s right, the man who invented the mortgage-backed security that was mainly to blame for the housing bubble was the man selected to solve the housing bubble. So what did he do with the funding? He directed it to his clients, which in turn grew BlackRock even more.
Housing Housing Housing
In the wake of the 2020 Pandemic, BlackRock grew substantially again thanks to the long list of businesses lining up for their consulting. Naturally, the company needed to find safe asset classes for all this newfound cash, so they turned to the booming housing market. Throughout 2020 and into 2021, BlackRock bought up single-family homes across the country. In some cases, the bank bought up entire housing developments before a single family could even move in. This seems to be a clear pump and dump scheme, but the feds haven’t seemed to notice.
Conclusion
BlackRock seems to keep getting bigger and bigger. They continue to buy up homes, businesses, and other banks, furthering their rise. Their technologies and risk management prowess have allowed them to profit off some of the most difficult financial times in American History. Many have pointed the finger at the company calling it a shadow bank or ‘too big to fail.’ One thing is for sure, BlackRock manages so much money that it can confidently be said that they control the world.
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