Written by  //  June 11, 2009  //  Economy, U.S.  //  Comments Off on Blackrock

Barclays lands capital-boosting BlackRock deal
LONDON/BOSTON — BlackRock has agreed to buy Barclays Global Investors to create the world’s biggest asset manager, in a US$13.5-billion deal that British bank Barclays hopes will put to rest concerns about its capital. The cash and shares deal, unveiled in the United States late on Thursday, will see Barclays take a 19.9% stake and two seats on the board of the enlarged group, to be called BlackRock Global Investors.
20 May 2009
Comments from Wednesday Nighters

  • Does not the Chinese government’s sovereign investment fund own a large chunk of BlackRock?
  • Defense companies sold and deployed millions of land-mines; subsequently, in a best case scenario, they are paid to clean up their mess. I think, the BR et al approach is as explosive. What will later add further injury, once the HFs repackaged these ‘mines’ under the new umbrella, this new ‘3-ply commercial paper’ (same 3-ply we all use) will once again find its way into the public coffers; directly or indirectly through the pension funds and other captive audiences.
  • Our loss is Blackrock’s gain
    (Truthdig) How much do you know about the BlackRock hedge fund? Better bone up fast, now that the folks at BlackRock are calling the shots in the government’s trillion-dollar bailout program. As both The New York Times and The Wall Street journal reported on Tuesday, BlackRock execs are now directing key elements of the government program at a time when they stand to reap great profits from the fallout of a problem they helped create.
    The U.S. picked BlackRock to manage the assets once controlled by AIG and Bear Stearns and to analyze the assets of Freddie Mac and Morgan Stanley. And as if that were not enough on its plate, the Treasury Department has just selected BlackRock to be one of the few firms trusted with using U.S. taxpayer dollars to buy toxic assets from the banks and then resell them in a process that presents enormous conflicts of interest with other BlackRock operations.
    Bank of America, with a 47% ownership position in BlackRock, is also the owner of what was once Countrywide Financial, which led the pack in selling bad mortgages. The disposition of those failed properties under BlackRock’s tutelage will have much to do with BofA’s future profitability. As if that were not enough financial incest, the former president and other top executives of Countrywide now run a company created by BlackRock, which is profiting mightily by snapping up the sort of distressed loans that they originally had marketed.
    Confused? You’re supposed to be. That’s the point of a successful hedge fund, a totally unregulated activity in which very rich people pool their money in order to more effectively rip off the rest of us. And BlackRock is at the top of that game, managing $1.3 trillion in assets. But in this round the stakes are far higher because BlackRock, which did a great deal to cause the economic meltdown, has now been put in charge of the government recovery effort.
    BlackRock may profit from fiscal crisis in many ways [NB Great interactive relationships chart]
    On Wall Street, Laurence D. Fink is an insider’s insider, the guy firms and countries go to when they’re in a jam.
    Fink, the CEO of BlackRock Capital Inc., an asset-management firm, has been especially busy for the last two years, given the worldwide financial crisis.He speaks often with Treasury Secretary Timothy F. Geithner, The Wall Street Journal reports, and he also talks with Rahm Emanuel, the White House chief of staff. Before the change in presidential administrations, Fink and BlackRock had a role in sorting out the Bear Stearns collapse and they advised AIG when that company ran aground. BlackRock also played a part in assessing the condition of mortgage giants Freddie Mac and Fannie Mae.
    And now it may be in the potentially lucrative position of profiting from the federal toxic asset plan it helped devise, as it is on the short list of firms that may be named by the government as buyers of these assets.
    19 May
    Wall St. Firm Draws Scrutiny as U.S. Adviser
    (NYT) The financial crisis has ravaged many a Wall Street giant, but it has also produced a handful of winners. BlackRock, a money manager that is much admired but little known outside financial circles, is fast emerging as one of the nation’s financial powerhouses.
    BlackRock Wears Multiple Hats
    In the Crisis, Fink’s Firm Is Buyer, Seller, Adviser; ‘Our Clients Trust Us’
    Laurence Fink has parlayed a lifetime of contacts and computer models into a powerful, controversial role for his firm in the financial crisis.
    (WSJ) The U.S. has selected BlackRock Inc., a money manager and risk-advisory firm, to manage mortgage assets once owned by Bear Stearns Cos. and American International Group Inc. Separately, the firm also has been tapped to analyze hard-to-price assets of Freddie Mac and Morgan Stanley, among other financial institutions in the crisis.
    Now, the Treasury Department has preliminarily granted BlackRock a coveted second-round interview to become one of a few money managers to buy toxic assets from U.S. banks, using taxpayer money, people familiar with the matter say. Mr. Fink aims to raise as much as $7 billion to invest through the program, which could yield his firm millions of dollars in fees. A Treasury spokesman says it is in negotiations to prequalify several fund managers

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