Well first of all, this is old news. Second of all, contrary to what a lot of people on here think, I'm pretty sure there isn't anything SUPER nefarious going on here. This is actually pretty typical Pre-Market Crash behavior. When investors, whether they be institutional like blackrock or private like a normal person, see a crash coming they tend to flock to safe investments like real estate that will help them weather the market storm.

In the case of what blackrock's doing, their diversity funds have decided to start selling off stocks and then invest the proceeds in real estate in order to shelter investors from the market crash everyone knows is coming. The reason they're paying 50% over in cash is because they're on a time crunch to convert stocks into real assets. So it's better to lose a little money in the short term, but still see consistent income and growth over the next year or two while the stock market tanks and recovers, than to stall and lose a lot of money by letting their stock portfolio crash.

I've said this before on here and got crucified for it, but blackrock and vanguard do NOT have trillions of dollars in assets. They have trillion of dollars in assets under management. Basically, that means people hand them money to manage for them, but they don't own it. They invest it for them, and then get paid a fee, usually a percentage of either dividends or assets under management per account, for their services.

So yes, they DO collectively manage the majority of stocks for every major corporation in the world, but they can't do anything with it other than buy or sell it at the owner and investment managers discretion. That's why blackrock and vanguard don't have a half a dozen board members that they've appointed to the boards of every major corporation on the planet, because they don't own the stock or have any voting rights.

It's just a form of business model. Another example of similar business model in a company that isn't an investment fund management company would be Publix. The entire corporation is owned by it's current and former employees. No one person has full voting rights in the Publix corporate hierarchy, because everyone who has ever worked there owns a piece of the company. That's why they have a weird workers union that appoints a representative to collectively vote on behalf of current and former employees who opts into the union. Blackrock and vanguard can't do anything like that since, as institutional investors, they don't even own the stocks they're managing. As such they can't vote, appoint board members, etc.

Besides all of that, blackrock doesn't actually make that much money. After paying off all of their investors dividends, paying their employees their salaries, and letting their fund managers take their cuts, they only make about $5 Billion a year from their $10 Trillion in funds. Quick math tells us that, because they're paying cash for all of these properties, if they invested every last bit of that income in real estate they could only buy up MAYBE 10K houses a year. For the record there's over a 100 million people who rent in the US out of 43 million rental units.

And that's not even the accurate number of houses they could buy a year since that doesn't include fees, the brokers cut, etc. And it's also illegal for them to mix money from different funds. You can't legally take money from an S&P 500 Index fund and invest it in real estate. The profits have to stay in that fund or be released to the investors since it's not black rocks assets that are actually making this money.

Don't get me wrong, I'm sure blackrock and vanguard are both evil cabal companies, but people are hyping them up to be something they're not and overexaggerating their current capabilities.

Well first of all, this is old news. Second of all, contrary to what a lot of people on here think, I'm pretty sure there isn't anything SUPER nefarious going on here. This is actually pretty typical Pre-Market Crash behavior. When investors, whether they be institutional like blackrock or private like a normal person, see a crash coming they tend to flock to safe investments like real estate that will help them weather the market storm.

In the case of what blackrock's doing, their diversity funds have decided to start selling off stocks and then invest the proceeds in real estate in order to shelter investors from the market crash everyone knows is coming. The reason they're paying 50% over in cash is because they're on a time crunch to convert stocks into real assets. So it's better to lose a little money in the short term, but still see consistent income and growth over the next year or two while the stock market tanks and recovers, than to stall and lose a lot of money by letting their stock portfolio crash.

I've said this before on here and got crucified for it, but blackrock and vanguard do NOT have trillions of dollars in assets. They have trillion of dollars in assets under management. Basically, that means people hand them money to manage for them, but they don't own it. They invest it for them, and then get paid a fee, usually a percentage of either dividends or assets under management per account, for their services.

So yes, they DO collectively manage the majority of stocks for every major corporation in the world, but they can't do anything with it other than buy or sell it at the owner and investment managers discretion. That's why blackrock and vanguard don't have a half a dozen board members that they've appointed to the boards of every major corporation on the planet, because they don't own the stock or have any voting rights.

It's just a form of business model. Another example of similar business model in a company that isn't an investment fund management company would be Publix. The entire corporation is owned by it's current and former employees. No one person has full voting rights in the Publix corporate hierarchy, because everyone who has ever worked there owns a piece of the company. That's why they have a weird workers union that appoints a representative to collectively vote on behalf of current and former employees who opts into the union.

Besides all of that, blackrock doesn't actually make that much money. After paying off all of their investors dividends, paying their employees their salaries, and letting their fund managers take their cuts, they only make about $5 Billion a year from their $10 Trillion dollars in funds. Quick math tells us that . because they're paying cash for all of these properties, if they invested every last bit of that income in real estate they could only buy up MAYBE 10K houses a year. For the record there's over a 100 million people who rent in the US out of 43 million rental units.

And that's not even the accurate number of houses they could buy a year since that include fees, the brokers cut, etc. And it's also illegal for them to mix money from different funds. You can't legally take money from an S&P 500 Index fund and invest it in real estate. The profits have to stay in that fund or be released to the investors since it's not black rocks assets that are actually making this money.

Don't get me wrong, I'm sure blackrock and vanguard are both evil cabal companies, but people are hyping them up to be something they're not and overexaggerating their current capabilities.