It’s been a difficult couple of years for BlackRock, the world’s biggest money manager. The firm remains to be enormously profitable, though it has recently taken some big hits due to its image as a promoter of progressive utopianism through its use of Environmental Social Governance — or ESG — investment guidelines.
Red state government officials are defenestrating the corporate from managing their pension money. The conservative commentariat has blamed the firm’s ESG screening of stocks for higher gas prices and inflation. The rap against BlackRock is that it promotes investing in “sustainable” energy sources but incentivizes oil corporations to stop drilling. Larry Fink, its voluble founder and CEO, has been branded as some form of C-suite leftist.
The reality is all the time more complicated than political agitprop, in fact. Fink is admittedly a moderate Democrat other than being a wonderful risk manager during a successful 50-year profession on Wall Street. BlackRock’s pure ESG portfolio is only a small percentage — $700 billion — of its $10 trillion in total assets under management.
Yes, Fink likes to talk, and he has evangelized, possibly an excessive amount of, concerning the necessity of going green, how climate change is a long-term threat to the economy and an investment opportunity. He says that the sustainable economy may very well be much like the tech boom — throwing off tens of millions of latest jobs and creating trillions in latest wealth. And so forth, and so forth.
Yet, Fink isn’t quite an ESG zealot as portrayed. He has also said the green economy must be done in a transition or you’ll get the inflation we have now now. The vast working class can’t afford electric cars. Plus, you won’t ever hear the letters E-S-G coming out of his mouth again. That’s right. The entire thing has develop into so politically toxic Fink has banned it from his vocabulary.
“You may say it, but I won’t,” Fink recently told me before expounding on the necessity for sustainable energy sources.
Yes, Larry could be a handful, and the red-state pension opposition isn’t letting up. It’s why my sources contained in the company say BlackRock’s flacks and marketing teams are working time beyond regulation to provide you with a latest, coherent message that fully explains the corporate’s ESG work and removes it from the present increasingly nasty political debateover the matter.
It won’t be easy. BlackRock’s messaging pickle was on display Tuesday night during a “summit” of business and finance execs sponsored by the news outlet Semafor when its business editor, Liz Hoffman, interviewed a person named Mark Wiedman, head of BlackRock’s global client business.
Given how many individuals invest with BlackRock, Wiedman is a reasonably large deal within the firm. He’s on the corporate’s short-list to switch the 70-year-old Fink when he retires, as is predicted in the following few years.
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Despite its attacks from conservatives, Wiedman said ESG is a “capitalist impulse . . . a requirement from clients.” Fair point. Larry Fink and BlackRock didn’t create the demand from blue-state pension officials and other virtue-signaling investors who want ESG porfolios.
He then got to why BlackRock management is grappling with easy methods to message ESG. BlackRock’s problem, Wiedman suggested, could be traced to talking an excessive amount of about ESG.
“Speak softly and invest money,” he said, “We don’t need as much talk,” he said, “ so we’ve been a bit quieter because actually, that’s what our clients are on the lookout for.”
Good luck with keeping Larry quiet.
SBF’s farce of a defense
The trial of accused crypto fraudster Sam Bankman-Fried, a.k.a the Notorious SBF, began last week. The chances of him getting exonerated are pretty low. A mountain of evidence against him comes from former co-workers who say he agreed to pilfer customers’ assets from his FTX crypto exchange to cover up billions of dollars of losses in his affiliated crypto hedge fund and to finance his lavish, jet-setting lifestyle that obviously didn’t include his personal hygiene.
Who knows what a jury might think, but I’ve covered dozens of white-collar fraud cases, and given the entire above, this case seems as airtight as they arrive. Perhaps that’s why SBF’s lawyers are throwing a Hail Mary crafting what’s best described as a “Sgt. Schultz defense.”
Schultz was a German prison guard within the utterly absurd World War II sitcom from the ’60s and early ’70s called “Hogan’s Heroes.” Kind-hearted and playing the a part of a idiot, Schultz allowed the titular character, Hogan and his band of POWs to flee each time they desired to sabotage stuff and return back to camp only to do all of it another time. After seeing all of it, Schultz would exclaim in a thick German accent: “I see nothing! I hear nothing! I do know nothing!”
I’m pretty sure the 31-year-old SBF never heard of Sgt. Schultz, but he and his lawyers are actually channeling the character’s fake obliviousness. Because the trial commenced, SBF’s lawyers argued that the previous crypto billionaire and wunderkind — as he feted celebrities and athletes to tout FTX, rubbed shoulders with wealthy and powerful investors, and wooed all those politicians about how he was creating wealth to make the world a greater place — was really a well-meaning stooge. Despite his degree in physics and math from MIT (he’s imagined to be good at figuring stuff out), he was easily hoodwinked by others at the corporate, including his ex-girlfriend who ran the hedge fund often called Alameda Capital.
What made “Hogan’s Heroes” work and Sgt. Schultz hilarious (no less than for me once I was a 10-year-old) was that it was all such a crazy, comedic farce.
Whenever you’re observing possibly life behind bars, like SBF is, best to not have a defense that’s a joke.