Did you know there is a shadow bank that oversees $21 TRILLION of the world's money?
It has a dominating stake in every major S&P 500 company.
It directs Trillions for the Fed, Central Banks, and Govt Treasuries.
The global financial ecosystem is ruled by this ONE COMPANY.
Larry Fink started Blackrock in 1988 after being fired from his previous job.
He had missed an important phone call and lost $100 million for his company.
The reason behind Blackrock's astronomical rise is Wall Street's best-kept secret.
It's called Aladdin, a robot supercomputer.
Aladdin oversees $21 Trillion of the global economy.
It directs funds for the US federal reserve, hundreds of banks, and thousands of traders and carries out 250,000 trades every single day.
It gobbles up billions of data points from every market.
Even the most sensitive private information is accessed by Aladdin.
Here's Rick Reider, CIO of Blackrock, explaining Aladdin's utility.
Every major financial institution, including Goldman Sachs and Vanguard, has come to rely on Aladdin.
40% of all of Wall Street's trades are executed by robots, and Aladdin is by far the leader.
Aladdin is the oxygen of the wealth management industry. Blackrock rose to power because of it.
But to stay in control, Blackrock has tilted the game in its favor.
1. Blackrock hires many former government officials into senior roles
- Thomas Donilon (former national security advisor to Obama)
- Dalia Blass from the SEC
- Coryann Stefansson from the Fed
2. Blackrock's top executives work for the government.
Joe Biden has appointed
- Blackrock executive Brindisi as the Head of the National Economic Council
- Larry FInk's Chief of Staff, Adeyemo, as Deputy Treasury Secretary
Since 2004, Blackrock has allegedly hired 64 govt. officials.
3. The government depends on Blackrock's deep access to sensitive data in times of crisis.
In 2009, the Gov asked Blackrock to handle assets of Bear Stearns and AIG, both on the verge of collapsing.
In 2020, the Fed picked Blackrock to handle its emergency asset-purchase.
4. Its ownership structure is circular. It owns shares in companies that own shares in Blackrock.
Let me explain...
The Big 3 of asset management (Blackrock, Vanguard, and State Street) collectively manage $15T.
Blackrock controls about 60% of that shared dominance.
Vanguard owns 9% of Blackrock.
Blackrock used to provide $2 trillion worth of liquidity to State Street.
A big chunk of Vanguard and State Street's funds are managed by Aladdin.
They own each other and together control Corporate America and beyond.
Blackrock also has massive equity positions in all major US firms.
It's one of the top 5 shareholders in all the S&P 500 firms you see below.
Blackrock is in charge of its own.
1. Data - Aladdin
2. Owners - Circular Ownership
3. Regulation - Blackrock likes the govt and hires from there. The govt. likes Blackrock and hires from it.
And that's how you create and hold on to complete dominance.
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If you liked this, you'll enjoy reading
How I grew my asset management company to fund $1.7 Billion.
Follow @ValKatayev for more threads on business.
PS. There is a misconception that a "Shadow Bank" is some negative term. It is not.
Nor did this thread say anything negative about them.
It is an official term for financial institutions that are not a bank.
In fact I'm very much intrigued by the platform and what they built.
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