The entrance to the Blackrock Investment Group building. (Christopher Michel / CC BY 2.0)

 

OPINIONS

At the same day of the appointment of the new Czech government of new premier Petr Fiala, the world's largest asset manager urged international investors not to lend to the new Czech cabinet. This was the BlackRock investment group, which owns, among others, significant shares in media companies Axel Springer, Warner Media, Verizon Communications and social platforms Twitter and Facebook.

According to the Czech National Bank, BlackRock works with a number of central banks and governments in Europe. The Czech National Bank has also confirmed (pdf) that it also cooperates with BlackRock in managing its equity and MBS portfolios ^[1].

Petr Fiala was appointed Prime Minister on 28 November 2021, and the members of his cabinet were appointed on 17 December 2021 (source).

On the same day, news emerged that BlackRock, as the world's largest asset manager, warned international investors against lending to the new Czech cabinet. "This is despite the fact that the interest rate on the Czech government's debt exceeds the interest rate on German debt by the most significant amount since 1999," said Czech economist, educator and author of economic literature Lukáš Kovanda on Newstream.cz (source).

BlackRock argued that they expect the Czech crown to weaken next year and interest rates to rise due to rapid inflation.

Along with Czech debt, BlackRock also warned against buying Polish and Hungarian debt.

This caught the attention of the NGO Habeas Corpus (HC), which approached the Czech National Bank to find out details of BlackRock's involvement in the bank's activities. (pdf)

Below are not only the CNB's responses regarding BlackRock, but also the experience of the Parliamentary Advisor to the Bundestag or the views of the HC Commissioner on possible security risks of information leaks.

 

RELATIONS BETWEEN BLACKROCK AND CNB

On 4 January 2022, the Czech National Bank (CNB) responded (pdf) to NGO inquiries that it had entered into investment services agreements with BlackRock Investment Management, LLC and BlackRock Financial Management, Inc.

"Under these agreements, BlackRock performs management of equity and MBS portfolios, and this is so-called passive management," the National Bank stated, adding that "there is no room for the manager to actively pursue its own investment recommendations, etc., it is largely a mechanical replication of the structure of investments within the indices ^[2]."

The CNB has briefly mentioned the cooperation with BlackRock in the past in the CNB's 2020 earnings report (pdf).

When asked who controls BlackRock's activities, the Czech National Bank stated the following: "In providing investment services, they are subject to regulation and supervision by the relevant authorities (i.e., in particular the Securities and Exchange Commission in the United States and the Financial Conduct Authority in the United Kingdom). If, for example, the ownership structure or the persons involved in the BlackRock companies were to jeopardise the provision of services in which the interests of clients and investors are paramount (and for whatever reasons, e.g. the presence of persons on sanctions lists, persons who can no longer be regarded as having integrity, etc.), the companies would cease to be authorised to provide financial services and the relationship between CNB and BlackRock would have to be terminated."

CNB further stated that it "monitors the activities of its business partners and has not observed any security risk," adding that "we also rely on the activities of the relevant authorities in this area."

 

FRIEBEL: CORPORATE INFLUENCE ON TOP POLITICIANS

Former parliamentary advisor to the Bundestag, Sebastian Friebel, said in December 2020 that during his time in the Bundestag he had observed that the German parliament hardly opposes corporations that want to influence the future development of society.

From his experience as a consultant in the field of renewable energies and energy technologies, he concluded: "One thing is clear beyond doubt: the ability of companies to negotiate is underestimated, the ability of states overestimated."

According to Fiebel, parliament does not have the capacity to protect citizens from access by corporations and big banks. "In fact, there are significant dependencies of states on companies like Google, BlackRock and big banks that like to invest in government bonds. In other words, those who provide public funding in times of crisis."

Sebastian Friebel also warned that the so-called digital passports are a project of private companies backed by the Rockefeller Foundation, Google, JP Morgan, the financial group BlackRock or some UN representatives. 

As early as December 2020, Friebel predicted that the media and governments would put forward the use of the covid passport as a basic requirement for the so-called "return to normal" in the coming months.

Friebel's full summary of his findings from his time in the Bundestag can be found here.

 

HC'S CONCERNS ABOUT MISUSE OF INFORMATION FROM CNB

Ing. Jiří Plicka, commissioner of the NGO Habeas Corpus, is not satisfied with the content of the CNB's answers regarding the security of data against misuse by BlackRock.

"It is indeed surprising that the CNB is tied to Black Rock, which through the mouth of its spokesman already warned international investors against lending to the new Czech government when it took office and further declared that the Czech crown would depreciate in 2022," Plicka told the Epoch Times

"As we know, Black Rock is one of the very aggressive funds, it owns stakes in pharmaceutical, media and other companies, and it is established to make profit," Plicka said.

In order to make a profit, Plicka said, "funds of this type are capable of doing anything."

The commissioner also pointed out that the security risks of CNB's cooperation with BlackRock and the protection of information and data that could be used to influence it must be consistently addressed. "Especially in a situation where BlackRock operates practically all over the world and information obtained at the Czech National Bank can be used in any way."

According to Plicka, there is a need to ensure that Black Rock "does not have access to confidential information at the CNB that can be used, for example, to speculate on the crown or can be misused in other ways," which retroactively suggests the possibility of putting pressure on the new Czech government to enforce certain procedures or policies.

The Czech National Bank Act (source) states that the CNB's main objective is to ensure price stability. The CNB ensures financial stability and the safe functioning of the financial system in the Czech Republic. A form of independence and impartiality is also enshrined in this Act.

According to the law, neither the CNB nor the Bank Board may accept or request instructions from the President of the Republic, Parliament, the Government, administrative authorities or any other entity. The Governor, Deputy Governors and other members are appointed and dismissed by the President of the Republic. No person may hold the office of member of the Board more than twice. Members of the Board shall be appointed for a term of 6 years.

 

Consumers’ Research Warns US Governors About BlackRock’s Retirement Fund Investments in China

Consumers’ Research, the oldest U.S. consumer advocacy organization, sent a letter (pdf) on Dec. 2 to 10 state governors warning them about the reliance of their states’ pension funds on BlackRock’s strong ties to China.

BlackRock, under Chief Executive Larry Fink, is the first foreign-owned company to receive a license to operate in China’s $3.5 trillion mutual fund industry, Forbes reported.

Consumers’ Research Executive Director William Hild sent the letter to the governors of Washington, Florida, New York, Nevada, South Carolina, Oklahoma, Pennsylvania, Montana, Nebraska, and West Virginia—the 10 states with the most investments in BlackRock.

Washington has the largest portfolio risk, with $13 billion of its state pension fund invested in BlackRock, the largest asset manager in the world.

The letter, coming after the findings in the 2021 U.S.–China Economic and Security Review Commission Report to Congress, was sent to “raise awareness among American consumers that BlackRock is taking their money and betting on China,” according to Hild. More here...

Source: The Epoch Times

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ABOUT THE BLACKROCK

We have previously reported on BlackRock in Who Controls the World's Biggest Media? Below we provide some basic information and useful links to further background information on the company.

The information below is current as of January 2021.

BLACKROCK INC.

As of 2020, BlackRock, Inc. has more than $6.47 trillion in assets under management (AUM). source (2019)

Major stocks owned:  Axel Springer, Fox Corporation, Warner Media, Verizon Communications Inc., Twitter, Facebook.

Principal Owners: BlackRock Inc - Stock Company - Management. (New York, USA)

Major Shareholders: Vanguard Group Inc. (8.17%), BlackRock Inc. (6.34%), Capital World Investors (4.55%), State Street Corporation (3.98%), Bank of America Corporation (3.91%), Temasek Holdings (Private) Limited (3.90%) and others. More...

- Number of shares in issue: 152 500 000

- number of publicly traded shares on the stock exchange: 140 900 000

= only 11,600,000 (7.6%) non-traded shares (presumably owned by management)

Conclusion: the company is almost entirely listed on the stock exchange. BlackRock Inc. owns 13.94% of its shares. Right behind it is Vanguard Group Inc. with approximately 9% of the stock. Interestingly, Vanguard Group Inc. owns significant stakes in companies owned by the world's media. Vanguard is a private company that owns 10.20% of Twitteru, among other things. Until recently, it was owned by John Bogle, who passed away in 2019. His ownership will now still be in the process of being transferred to posterity, he had 6 children. Bogle was a Clinton, Obama and Hillary Clinton (US Democratic Party) voter.