O-DOG FINK

O-DOG FINK

Yesterday, you may recall, we suggested that a number of America’s business leaders are delusional in that they firmly believe that they, and they alone, can make business succeed.  Unfortunately, Jamie Dimon and Bob Iger are not the only CEOs in this country with ridiculously inflated perceptions of their own abilities and indispensability.  And they’re not even close to the worst or most dangerous.  Both those titles belong to someone else, someone very familiar to most of you.

We won’t be breaking any news here.  Indeed, almost every story we discuss below is one we have discussed before.  Taken in sum, however, they paint a pretty damning picture of one man in particular, who has both an outsized impression of himself and his “unique” abilities and outsized influence on American capital markets and the global economy.

This first short clip is from CNBC and was published on April 18, 2019:

China’s Luckin Coffee, a self-declared challenger to Starbucks, has raised $150 million in its latest round of funding from investors including BlackRock, which values the company at $2.9 billion.

The investment, $125 million of which came from a private equity fund managed by BlackRock, follows a $200 million funding round in November that had increased the company’s valuation to $2.2 billion, Luckin said in a statement on Thursday.


This second clip comes from BlackRock CEO Larry Fink’s March 29, 2020 letter to shareholders:

Our focus on long-term opportunity and structural change is also reflected in the way we approach growing markets, such as China. I continue to firmly believe China will be one of the biggest opportunities for BlackRock over the long term.


This is from CNBC just four days later:

Luckin Coffee disclosed Thursday that an internal investigation has found that its chief operating officer fabricated 2019 sales by about 2.2 billion yuan ($310 million).

Shares cratered more than 80% in premarket trading after the release of the regulatory filing. Recently shares were down nearly 72%, wiping out nearly $5 billion from its market value.

The investigation found that Jian Liu, Luckin’s chief operating officer, and several employees who reported to him, had engaged in misconduct, including fabricating sales. Liu and the employees implicated in the misconduct have been suspended, and Luckin said it will take legal action against those responsible.


This one is from the August 16 edition of The Financial Times:

BlackRock’s research unit has said China should no longer be considered an emerging market and recommended investors boost their exposure to the country by as much as three times.

The New York-based investment house’s internal think-tank suggested the higher allocations to Chinese stocks and debt as the country’s capital markets have boomed in size and sophistication.

“China is under-represented in global investors’ portfolios but also, in our view, in global benchmarks,” Wei Li, chief investment strategist at the BlackRock Investment Institute (BII), said in an interview. “It has the second-largest equity market, the second-largest bond market. It should be represented more in portfolios.”


This bit is from James Mackintosh’s “Streetwise” column in the September 21, edition of the Wall Street Journal:

Teetering Shenzhen property conglomerate China Evergrande is the Chinese economy in miniature. Both have operated for decades on the principle that it was worth borrowing to build, in Evergrande’s case mostly housing, in China’s case not just apartments, but roads, rail, airports and other infrastructure.

Evergrande’s business has run out of credit, in large part due to policy shifts by the Chinese government. Investors have watched in horror as its bonds, and those of other wobbly property developers, collapsed. China’s economic model has also run out of road, and the process of putting it on a new track is likely to bring more Evergrande-like mistakes.

We now have to contend with the short-term risks of spillovers from Evergrande while assessing the longer-term effects from the shift in China’s economic model. Both could have serious implications for the rest of the world.


And finally, there’s this, from the same day – September 21 – in the Financial Times:

Funds managed by BlackRock and HSBC added to their holdings of Evergrande bonds just months before a liquidity crisis at the Chinese property developer pushed it to the brink of default.

BlackRock in August bought up five different Evergrande dollar bonds through one of its high-yield funds, which had holdings in the developer then worth $18m, Morningstar data show.  The size of the holding had already expanded sharply this year as the fund’s assets under management rose.

The world’s biggest asset manager had total exposure of close to $400m across its funds, according to data compiled by Bloomberg based on June, July and September filing dates.


Not to put too fine a point on it, but this guy, Larry Fink, is a Menace II Society, much more so than O-Dog ever was.

Unfortunately, neither he nor anyone around him nor most of Wall Street nor even the former President of the United States seems to get that.  Even more unfortunately, there’s also this, from the September 15 edition of the Wall Street Journal:

BlackRock Inc. BLK +0.10% has vaulted from fourth to first place in socially responsible fund assets in the past 18 months with a barrage of 29 launches of mutual funds and exchange-traded funds.

Long the No. 2 index mutual-fund and ETF manager behind Vanguard Group, BlackRock BLK 0.08% has gained ground thanks to its deep ties with institutional investors and a push to include its sustainable funds in model portfolios used by advisers with individuals as clients. 

The blitz of new funds from BlackRock, led by iShares product chief Carolyn Weinberg, has helped quintuple assets in BlackRock’s sustainable mutual funds and ETFs to $58.8 billion in June, from $10.3 billion at the end of 2019, according to Morningstar.


Fink is being rewarded – for being a smooth-talking, destructive grifter.  The difference between him and, say, Bob Iger is that when Fink’s arrogance and egotism finally catch up with him, it’ll cost mom, pop, and everyone else their $10 trillion in retirement savings, as well as triggering a global financial meltdown.  The phrase “Lehman moment” will come to mean something much different than it does now: a small, unimportant preview to the main attraction, the “BlackRock moment.”

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