BlackRock, Other Investment Firms 'Killing The Dream' of Home Ownership, Journalist Says

#26
#26
Thunder Good-Oil said:
I doubt that BlackRock will need any government buyout. They have nearly $10 trillion of assets under management. They won’t be overly weighted in single family properties. Plus improved real estate comes with terrific tax advantages and they have a lot of profit needing to be sheltered. There would be much more economic chaos from a housing market crash with the people carrying 95%-100% loans.

The demographics (and their highly successful tract record) suggest that BlackRock knows what they are doing. The Millennials and the Boomers are the largest population bases. When the Boomers hit the housing market the suburbs took off. That cheap land isn’t there for this cycle. BlackRock can use the sweet spot of real estate tax benefits for 7-10 years and then sell their inventory into to rising home ownership base as they age into the housing market.
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I have had the privilege to work with the BR on a couple of projects. They absolutely know what they are doing.
 
#27
#27
Thunder Good-Oil said:
I doubt that BlackRock will need any government buyout. They have nearly $10 trillion of assets under management. They won’t be overly weighted in single family properties. Plus improved real estate comes with terrific tax advantages and they have a lot of profit needing to be sheltered. There would be much more economic chaos from a housing market crash with the people carrying 95%-100% loans.

The demographics (and their highly successful track record) suggest that BlackRock knows what they are doing. The Millennials and the Boomers are the largest population bases. When the Boomers hit the housing market the suburbs took off. That cheap land isn’t there for this cycle. BlackRock can use the sweet spot of real estate tax benefits for 7-10 years and then sell their inventory into the rising home ownership base as they age into the housing market.
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Lehman Brothers was about $700b when they collapsed so just because you’ve convinced someone to let you invest their money doesn’t mean they are doing a good job with it, remember Bernie Madoff?
 
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#28
#28
Wireless1 said:
Lehman Brothers was about $700b when they collapsed so just because you’ve convinced someone to let you invest their money doesn’t mean they are doing a good job with it, remember Bernie Madoff?
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Madoff was a Ponzi scheme con artist. BR has hard assets and real value.
 
#29
#29
Wireless1 said:
Lehman Brothers was about $700b when they collapsed so just because you’ve convinced someone to let you invest their money doesn’t mean they are doing a good job with it, remember Bernie Madoff?
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You’re comparing Bernie Madoff, a convicted con artist that stole the life savings of a bunch of people, with the largest asset manager in the world?

I mentioned BlackRock’s nearly $10 trillion of AUM as a comparison of how tiny their entrance into single family residential real estate is relative to their other investments. Even if they invest $100 billion in housing that’s only around 1% of their investments. Lehman on the other hand bet the farm by being overly concentrated in sub-prime mortgages. BlackRock is the best of the best. They have no serious peer.
 
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#30
#30
Thunder Good-Oil said:
You’re comparing Bernie Madoff, a convicted con artist that stole the life savings of a bunch of people, with the largest asset manager in the world?

I mentioned BlackRock’s nearly $10 trillion of AUM as a comparison of how tiny their entrance into single family residential real estate is relative to their other investments. Even if they invest $100 billion in housing that’s only around 1% of their investments. Lehman on the other hand bet the farm by being overly concentrated in sub-prime mortgages. BlackRock is the best of the best. They have no serious peer.
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BR has been entrusted with protecting and growing$10 Trillion of other people's wealth (pensions, unions, investors.) Just like Bernie and Lehman Brothers. Both of them were at one time trustworthy and sound too. I'm just saying that all it takes is one person/opportunity/situation where BR can head in the same direction.
BTW Bernie did not start as a Ponzi, it was only when he grew so big that he could no longer deliver the returns from the beginning that he went rouge.
If BR (or anyone) becomes too big they can only rise with the tide.
 
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#31
#31
BlackRock and Lehman couldn’t be more different. Lehman languished for decades going through multiple recapitalizations. BlackRock came out of a risk management business model and expanded while acquiring and growing other businesses. Lehman went under during the financial crises while BlackRock was hired by the government to sort through the carnage.

Comparing BlackRock with a piss-ant crook like Bernie Madoff isn’t worth addressing.

Buying up some single family residential real estate as a small portion of BR’s portfolio will never lead to a needed government bailout of that firm.
 
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#32
#32
Thunder Good-Oil said:
BlackRock and Lehman couldn’t be more different. Lehman languished for decades going through multiple recapitalizations. BlackRock came out of a risk management business model and expanded while acquiring and growing other businesses. Lehman went under during the financial crises while BlackRock was hired by the government to sort through the carnage.

Comparing BlackRock with a piss-ant crook like Bernie Madoff isn’t worth addressing.

Buying up some single family residential real estate as a small portion of BR’s portfolio will never lead to a needed government bailout of that firm.
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I'm not arguing with you, I agree BR in 2021 appears to be a very stable, well managed company, but they are only 33 years old. Lehman Brothers was well run and well respected for more than 100 years before they got lazy and greedy, the same for Bernie. That's the problem with well respected people/organizations who decide they can play near the edge, keep moving the edge.
One red flag for me with BR is that they announced they are divesting of a half a billion in coal for the "environment." If you want to divest because you think coal will collapse, tell me but when your "risk management" company starts making financial decisions impacting my wealth, based on what they think is good or bad, they are in the wrong business, and I'm using the wrong manager.
 
#33
#33
Wireless1 said:
I'm not arguing with you, I agree BR in 2021 appears to be a very stable, well managed company, but they are only 33 years old. Lehman Brothers was well run and well respected for more than 100 years before they got lazy and greedy, the same for Bernie. That's the problem with well respected people/organizations who decide they can play near the edge, keep moving the edge.
One red flag for me with BR is that they announced they are divesting of a half a billion in coal for the "environment." If you want to divest because you think coal will collapse, tell me but when your "risk management" company starts making financial decisions impacting my wealth, based on what they think is good or bad, they are in the wrong business, and I'm using the wrong manager.
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They “announced” their divestiture in coal was for environmental reasons. That doesn’t mean that the actual reason wasn’t based on the viability as an investment and they are getting extra mileage and free publicity by promoting the green angle. There isn’t a trend to build or re-fire shuttered coal plants. They remain one of the largest investors in, if not the largest investor, in Exxon, Chevron, BP, and RD Shell.
 
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#34
#34
Rasputin_Vol said:
If that were true, they would be buying these homes at below market value, not outbidding (or overbidding) for homes that are clearly excess inventory. How else do you buy up entire neighborhoods? Excess inventory, that's how?
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BlackRock is the world's largest asset manager, with $8.67 trillion in assets under management as of January 2021.
If anyone wants to take a look at their balance sheet: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001364742/c7a7c1bc-6afa-4e2a-929e-aa2af777caeb.pdf
Insanity.
Blackrock bought low during the recession and is buying high now simply because they've saturated every other avenue for investment. They must commit money to something and so they shove it into every nook and cranny they can. They are limited by regulation in how much they can commit----they can't simply buy out whole corporations. Buying real estate now is a long-term strategy, it's not especially smart to buy near the top of a bubble but they do it anyway because almost anything is better cash. They want to buy tangible assets in case the economy goes to s***

BlackRock is buying hundreds of thousands of homes across America
Doing it with free taxpayer money from the FED
With the goal to "diversify" middle American neighborhoods
And the end goal ?? Americans being forever renters to wall street

Capital Vol. 3 should be required reading for this day and age.
  1. The conversion of Surplus Value into Profit and the rate of Surplus Value into the rate of Profit
  2. Conversion of Profit into Average Profit
  3. The Law of the Tendency of the Rate of Profit to Fall
  4. Conversion of Commodity Capital and Money Capital into Commercial Capital and Money-Dealing Capital (Merchant's Capital)
  5. Division of Profit Into Interest and Profit of Enterprise, Interest Bearing Capital.
  6. Transformation of Surplus-Profit into Ground Rent.
  7. Revenues and Their Sources
“Every society is three meals away from chaos.”
 
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#35
#35
$400,000 x 200,000 homes is $80 billion which is less than 1% of $8.57 trillion.

I really don’t believe that BlackRock’s end goal is to prevent citizens from owning homes.
 
#36
#36
Thunder Good-Oil said:
$400,000 x 200,000 homes is $80 billion which is less than 1% of $8.57 trillion.

I really don’t believe that BlackRock’s end goal is to prevent citizens from owning homes.
Click to expand...
So let’s think this through. Your a teacher in CA “paying” into your BR pension fund. BR is using your investment to buy houses in your neighborhood, driving the price up so you can’t buy. Instead you rent one of these homes at a inflated price.
 
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#37
#37
newarkvol said:
BlackRock is the world's largest asset manager, with $8.67 trillion in assets under management as of January 2021.
If anyone wants to take a look at their balance sheet: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001364742/c7a7c1bc-6afa-4e2a-929e-aa2af777caeb.pdf
Insanity.
Blackrock bought low during the recession and is buying high now simply because they've saturated every other avenue for investment. They must commit money to something and so they shove it into every nook and cranny they can. They are limited by regulation in how much they can commit----they can't simply buy out whole corporations. Buying real estate now is a long-term strategy, it's not especially smart to buy near the top of a bubble but they do it anyway because almost anything is better cash. They want to buy tangible assets in case the economy goes to s***

BlackRock is buying hundreds of thousands of homes across America
Doing it with free taxpayer money from the FED
With the goal to "diversify" middle American neighborhoods
And the end goal ?? Americans being forever renters to wall street

Capital Vol. 3 should be required reading for this day and age.
  1. The conversion of Surplus Value into Profit and the rate of Surplus Value into the rate of Profit
  2. Conversion of Profit into Average Profit
  3. The Law of the Tendency of the Rate of Profit to Fall
  4. Conversion of Commodity Capital and Money Capital into Commercial Capital and Money-Dealing Capital (Merchant's Capital)
  5. Division of Profit Into Interest and Profit of Enterprise, Interest Bearing Capital.
  6. Transformation of Surplus-Profit into Ground Rent.
  7. Revenues and Their Sources
“Every society is three meals away from chaos.”
Click to expand...
You don't see anything wrong with an entity like BlackRock buying up all kinds of assets during a time when we have endless money printing? You don't think there may be a connection between the money printing and these purchases? Maybe, just maybe, the FED is indirectly allowing private entities to compete and outbid us peons over physical assets.

"You will own nothing and like it..."
 
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#38
#38
Rasputin_Vol said:
You don't see anything wrong with an entity like BlackRock buying up all kinds of assets during a time when we have endless money printing? You don't think there may be a connection between the money printing and these purchases? Maybe, just maybe, the FED is indirectly allowing private entities to compete and outbid us peons over physical assets.

"You will own nothing and like it..."
Click to expand...

No....you may be right. Follow the money
The Political Establishment Doesn’t Want You to Know the Economy Is Rigged
 
#39
#39
Thunder Good-Oil said:
$400,000 x 200,000 homes is $80 billion which is less than 1% of $8.57 trillion.

I really don’t believe that BlackRock’s end goal is to prevent citizens from owning homes.
Click to expand...
Outside of Apple, who just has $80 billion in cash just laying around? What is the market cap for BlackRock?
 
#40
#40
Rasputin_Vol said:
Outside of Apple, who just has $80 billion in cash just laying around? What is the market cap for BlackRock?
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BLK’s market cap is $134.4 billion. About 4x book value.

BlackRock’s net inflows are running about a half trillion/year. BR has another $80 billion laying around every 2 months.
 
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#41
#41
Wireless1 said:
So let’s think this through. Your a teacher in CA “paying” into your BR pension fund. BR is using your investment to buy houses in your neighborhood, driving the price up so you can’t buy. Instead you rent one of these homes at a inflated price.
Click to expand...

3% mortgages are driving up home prices far more than BR.

BTW, renting in CA isn’t a bad idea rather than watching your house plummet in value as liberal municipalities and the entire state crash and burn.
 
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#42
#42
#44
#44
Rasputin_Vol said:
You don't see anything wrong with an entity like BlackRock buying up all kinds of assets during a time when we have endless money printing? You don't think there may be a connection between the money printing and these purchases? Maybe, just maybe, the FED is indirectly allowing private entities to compete and outbid us peons over physical assets.

"You will own nothing and like it..."
Click to expand...
They didnt need free fed money to outbid us.
 
#46
#46
LouderVol said:
They didnt need free fed money to outbid us.
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Argument makes no sense. BR didn't need government money to do this. And the free money just gave the regular citizen more free cash to use for home purchases. If anything the Fed made the property more expensive for BR to purchase
 
#47
#47
During the 1950s, 1960s, and 1970s developers bought up farm land surrounding urban areas and converted it into suburbs. There were economic repercussions from that as well. Investment will flow into opportunities. As asset managers buy up existing homes, if there is an imbalance of demand to own rather than to rent, then rental properties will hit the secondary market to satisfy the demand. Right now a lot of Millennials prefer to be renters that call Maintenance when their toilet is leaking or their HVAC is blowing the wrong temperature.

If lumber prices remain high and aluminum stays cheap, more residential properties will have aluminum studs holding up sheet rock. It’s just capitalism at work. It’s never stagnant.
 
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#48
#48
Thunder Good-Oil said:
During the 1950s, 1960s, and 1970s developers bought up farm land surrounding urban areas and converted it into suburbs. There were economic repercussions from that as well. Investment will flow into opportunities. As asset managers buy up existing homes, if there is an imbalance of demand to own rather than to rent, then rental properties will hit the secondary market to satisfy the demand. Right now a lot of Millennials prefer to be renters that call Maintenance when their toilet is leaking or their HVAC is blowing the wrong temperature.

If lumber prices remain high and aluminum stays cheap, more residential properties will have aluminum studs holding up sheet rock. It’s just capitalism at work. It’s never stagnant.
Click to expand...

Aluminum is becoming very scarce and rising in cost fast.
 
#49
#49
Y9 Vol said:
Aluminum is becoming very scarce and rising in cost fast.
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Interesting. I just saw a day or two ago that there is an oversupply of aluminum cans and recyclers aren’t paying jack s*** for them. Maybe there isn’t infrastructure to convert spent cans into 2x4 studs.
 
#50
#50
Thunder Good-Oil said:
Interesting. I just saw a day or two ago that there is an oversupply of aluminum cans and recyclers aren’t paying jack s*** for them. Maybe there isn’t infrastructure to convert spent cans into 2x4 studs.
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That's exactly it. I commented on this last year when stories of aluminum can shortages first popped up. The cola companies began to only can their top tier sellers after that occurred. It wasn't until today as a matter of fact that I've seen cherry coke in 12 can packs anywhere since last summer.
 
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