major financial institutions have teetered on the edge of collapse and some have failed as uncertainty has grown many banks have restricted lending credit markets have Frozen and families and businesses have found it harder to borrow money we're in the midst of a serious financial crisis and the federal government is responding with decisive action so I propose that the federal government reduce the risk posed by these troubled assets and Supply urgently needed money so Banks and other financial institutions can avoid collapse and resume lending this rescue effort is not aimed at preserving any individual company or
industry it is aimed at preserving America's overall economy January issue the bailout was Far bigger than the Federal Reserve let the public or even members of Congress know at the time during the 2008 meltdown when the government bailed out two big to fail giants like bar Sterns AIG Fanny May Freddy Mack who did they hire to analyze and clean up the mess another giant Financial firm by the name of Black Rock led by a very well-connected billionaire by the name of Larry fin Black Rock was awarded these key government contracts to help with the Meltdown
with no competitive bidding while being enveloped in secrecy basically Larry was hired to be the manager of Washington's bailout of Wall Street even though black rock is one of the biggest shareholders in the same Banks they were helping to get bailed out making Larry Fink the most powerful man in the post bailout economy fast forward to the 2020 pandemic Rick quick question for you sir we're just getting word from the Federal Reserve and this might be boosting the markets uh even more this afternoon they are talking about the details of their corporate bond purchases the
FED making history today and for the first time ever be began buying corporate debt ETFs the unprecedented move driving an explosion in the corporate debt Market we are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible but again as I mentioned the FED two weeks ago began buying individual corporate bonds and we just got granular detail about what types of purchases it made yesterday and who did the money printer of the US the Federal Reserve hired
to manage their scheme to buy corporate bonds basically they were bailing out corporations that had too much debt to withstand the pandemic you guessed it they went right back to Black Rock even though again the same corporations Black Rock was helping to bail out were the same corporations that they own some of the biggest stakes in keep in mind though these are just the top 10 Holdings the whole list which the FED has published on the New York fed website includes 794 companies so yes these are just the top 10 by Holdings but there are
hundreds of other companies that could be part of the fed's portfolio as well Larry Fink was the most powerful man in the post bailout economy and now he's arguably one of the most powerful men in the post-pandemic economy as well and yet despite all his considerable power the general public has practically never heard of Larry Fink with black rock barely coming into the public eye during the recent claims that they were buying up single family homes that's because Larry is smart he's intentionally kept it that way he spent the last 33 years building black rock
into the biggest asset manager in the world with over9 trillion under their management not billion trillion with a te today black brot's clients include the retirement accounts of average everyday people in the form of Pension funds they also have Sovereign wealth funds as their clients other central banks College endowments Fortune 500 companies and millions of individual investors they're one of the top shareholders of many of the biggest publicly traded companies like apple Microsoft Facebook and even other major Banks like Wells Fargo and Chase and to put their $9 trillion into perspective the 300 largest Pension
funds in the world only hold a collec of $6 trillion van guard the Behemoth behind mutual funds and ETFs Trails behind Black Rock with only 7.1 trillion under management and if you put the big three Asset Management firms together Black Rock Vanguard and State Street they control a collective $15 trillion roughly equivalent to nearly 70% of the US's GDP and Larry has done all of this largely in the shadows with just a few occasional interviews and appearances on CNBC he's like the wizard of O the man behind the curtain as William Cohen puts it a
former investment banker and author of House of Cards an account of the bar Stern collapse this is Black Rock what some call the most influential financial institution in the world the world's largest Shadow bank and perhaps the company that owns the world when Larry was asked by Bloomberg if it's true that he's the most powerful man in finance the man responsible for $9 trillion doll tried to convince you otherwise that quote I don't think of myself as powerful end quote is that true does Black Rock own the world well it's a little bit [Music] complicated
[Music] Black Rock Bast some impressive stats in 2010 they were called the most influential financial institution in the world and in 2014 they had 4 trillion under management making them the world's biggest asset manager for comparison the Industrial and Commercial Bank of China only had $3 trillion at that time and as I just mentioned their assets have doubled to more than 9 trillion dollars over the past 7 years it seems blackw has a hand in nearly everything these days there are top shareholders in some of the world's biggest publicly traded companies a top shareholder of
banks like Deutsche Bank at 4.81% in 2020 they were approved by the Chinese government to set up a mutual fund in China making Black Rock the first foreign asset manager to be greenlighted for L they also have shares and companies all over Europe including Industries like energy oil and gas Transportation food and of course finance and here's the kicker Black Rock has what's called circular ownership where they own shares and companies that own shares in Black Rock definitely not a conflict of interests so they're literally everywhere because of their staggering size and power and the
fact that they largely operate out of sight Black Rock has been called the world's largest Shadow Bank the question is what makes someone build something this big Larry fing is known as the guy who always wanted more than he had friends have called him obsessive paranoid about maintaining control he's been regarded as someone who knows the Marcus inside and out and understands business backwards and forwards but it took him a massive hundred million loss to get to this point Larry majored in political science at UCLA and got his start on Wall Street at age 23
having that edge in politics Will later play a crucial role in him being the deao middleman between Washington and Wall Street he received offers from some of the top investment Banks but decided on first Boston where he worked on structuring and trading bonds which sounds incredibly interesting he rose up the ranks quickly and within a decade he became somewhat of a legend on Wall Street by helping develop the death securitization Market where loans like car loans credit card loans mortgages would be bundled together slic into pieces and sold to other investors if this sounds familiar
it's because these are the same mortgage back Securities that led to the 2008 meltdown but before that happened this securitization of debt was considered really Innovative and it transformed the face of Finance all of a sudden if you're a giant bank or pension fund or whatever that wants to invest in the housing market you can now invest in a mortgage back security made up of thousands of hopefully safe loans Larry f created one of the main tools that led to the Meltdown and he was also the one the US Treasury hired to clean it up
his interest in policy and strategic Wizardry helped him gain a reputation as a true investment Mastermind and for that he was rewarded Larry was making bank and received a ton of accolades at just 31 he became first Boston's youngest managing director in history many even thought he would go to run the firm someday in total he helped add about a billion dollars in assets to First Boston's bottom line but then the rising star Came Crashing Down shortly after one of his biggest wins Larry lost $100 million for his company a Mis call on his hand
resulted in trades being wiped out as as well as the hedges designed to offset those losses being wiped out and overnight Larry went from a hero to a toxic asset that should be avoided at all times he was ostracized his reputation went up in flames and his colleagues wanted nothing to do with them he was forced out of the company he spent 12 years making around a billion dollars for while a catastrophe like this might Mark The End for many people that wasn't the case with Larry instead he used it as ammunition vowing to never
find himself in a position where he didn't understand the risk he was taking again and in 1988 he was 35 and hellbent on rebooting his career so Larry co-founded the Blackstone Group along with now billionaire investor Steven schwarzman they started off with a $5 million line of credit fast forward to 1993 and they were crushing it with $20 billion under management but in what some would call a power struggle between thinkink and schwarzman where two super strong personalities collided the two-parter ways and Larry broke off to found Black Rock channeling all his pain and Trauma
into growing The Firm at a staggering rate by 1999 it went public for 375 Million by 2004 emerged with maril Lynch adding half a trillion dollars to Black rots assets and today it's at 9 trillion while the size of black rock is impressive what really sets them apart is our software platform called Aladdin basically a super computer they use for their [Music] clients Aladdin is a network of 5,000 computers Black Rock uses to monitor millions of Trades and analyze their clients's portfolios 24 hours a day to perform risk analysis Aladdin is so widespread today that
it's basically the central nervous system for many of the largest players in the investment management industry and for them to be able to offer the service they have to be granted access to sensitive data from Banks insurance companies Pension funds and other important institutions all over the world this high-end computer Farm literally goes over every possible scenario and pinpoints anything that could possibly go wrong allowing their clients to make the best investment decisions and it's through Aladdin that blackw actually oversees more like $21 trillion worth of assets instead of just 9 trillion and that's just
from a third of Aladdin's 240 clients which means that one company Black Rock has an eye on the equivalent of at least 10% of all the stocks and bonds in the [Music] world 2018 the world enters a global financial crisis that hasn't been seen since the Great Depression and W Street needs Washington to bail them out who do they call to manage the bailout as you already know Black Rock the New York fed personally went to Larry to help manage $30 billion in toxic assets from be Sterns they brought Black Rock in to advise them
on how to hand out the100 billion do of toxic assets from AIG they even contracted black Rock to deal with the $31 billion of City groups assets all of which were done behind closed doors with no competitive bidding and just like that Larry was more powerful than ever he went from being the laughing stock of Finance to being the Lynch pin between Wall Street and Washington as One Bank executive said Larry has always wanted to be important and now he's more important than he ever dreamed of and he's loving it in the end they made
at least $200 million off of these contracts in total the massive size of these contracts as secrecy surrounding them and black Rock's enormous influence started getting people talking quote it's like the Blackwater of Finance almost a shadow government Blackwater as in the most infamous private military contractor during the war and Terror check out our mini documentary on them to learn more link below now on the surface this may sound bad this may sound pretty shady and corrupt but if you think about it if the government is going to step in which they are even though
I don't completely agree with that what else are they going to do they're at least partially responsible for this mess for setting such low interest rates so they're obviously already incompetent they're not experts in things like mortgage backs Securities so why wouldn't they go to the man that is an expert to help Pioneer these things in the first place I'm not saying it isn't shady and corrupt I'm just saying that giving these million doll contracts to a man like Larry thinkink is understandable and it didn't stop there when did you know what hit the fan
in March 2020 with Co Black Rock came to the rescue for both Wall Street and the government again the Federal Reserve hired them to help bail out corporations with too much debt or that need to borrow money to stay afloat which again included corporations they have huge stakes in which is again definitely not a conflict of interests they also help the FED purchase more mortgage back Securities on top of that so where does Black Rock go moving forward what does a man do when he already has everything in 2019 people were petitioning against black rock
for being among the top shareholders for oil and coal production in fact investing in heavy pollution Industries has basically been the backbone of Black Rock portfolio over the years so according to Larry they're making a push towards environmental social and sustainable investing whether or not they actually believe in this stuff is yet to be known nevertheless it does appear they've made legit efforts to expand into this more eco-friendly Market with new environmentally focused products they' partnered with activist investors they backed a shareholder resolution basically forcing Exon Mobile to get serious about climate change Larry even
straight up wrote a letter telling companies that they need to quote contribute to society to receive his firm's support this new push for sustainable investing or ESG investing is a big reason why you see so many corporations trying to appear woke these days if you want to invest in a company they will on their investor relations page they'll show you their ESG score ESG stands for environmental social corporate governance and this is where the woke culture comes from so they've created this kind of phony baloney rating system that says well if you I'm I'm exaggerating
but if you mention that you are you know have a green agenda and you and you believe in carbon credits and you might trade some credit somewhere then you get a higher score and therefore you're more investable and it's very interesting to see how big investor like insurance company institutional investors they are steering away from anything that does not have the right ESG rating and so in order to uh have investors continue to be interested in the stock which is important for the company for its perception certainly for the uh the officers of the company
and the shareholders uh you have to move this move this along continuously and so it's very simple to see why doing a woke ad as Nike or as any other company um and and uh pride month is fantastic because you could pride is easy throw up some Flags show the right people trans whatever and you got a high ESG score the main catalyst for Larry success is the soul crushing humiliation he experienced after losing $100 million that's what really catapulted black rock into what it is today he put his entire being into the company and
most people agree that he's still as driven as ever today when asked on a personal level what's important this is what he had to say this may sound tra but it's really important for me to be perceived as a good human being a caring individual that always comes across as real and unpretentious and one thing I tell everybody you may not be able to print this is that I'm the same turret I was 30 years ago and I'm really proud of that if there is indeed an American oligarchy today Larry thinkink would definitely be one
of them but is he a good oligarch or a bad one are they just putting on a show to keep the public at Bay how influential is Black Rock really how much control over the world do they really have let me know what you think in the comments below [Music] [Music]
