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Wednesday, October 19, 2022

Coal state taking down BlackRock

There is irony in BlackRock reducing its investments in coal, a mineral that some of us mistakenly call a black rock. There also is blowback. West Virginia and its buddy states are fighting back.

It all began with a tweet in January by state Treasurer Riley Moore.

The announcement said, "The decision was based on recent reports that BlackRock has urged companies to embrace net zero investment strategies that would harm the coal, oil and natural gas industries, while increasing investments in Chinese companies that subvert national interests and damage West Virginia’s manufacturing base and job market."

Besides coal, West Virginia produces oil and natural gas. 

Moore said, "Any company that thinks Communist China is a better investment than West Virginia energy or American capitalism clearly has a bad strategy. We will continue to give our state’s business to people who aren’t simultaneously trying to destroy our economy."

At the time, BlackRock was a $10 trillion investment company. West Virginia's holdings were pathetically small. $20 million, according to the New York Times. Moore was the ant trying to move that rubber tree plant. But he had high hopes. Besides, what else could he do?

In 2020, the $10 trillion company told shareholders, "Thermal coal is significantly carbon intensive, becoming less and less economically viable, and highly exposed to regulation because of its environmental impacts. With the acceleration of the global energy transition, we do not believe that the long-term economic or investment rationale justifies continued investment in this sector."

A Republican Legislature gave state officials the power to retaliate against these bullies.

NYT said, "While the coal business is waning, it is still big business in West Virginia. Taxes from coal and fossil fuel industries are the third-largest source of funds for West Virginia, according to the state. In the most recent fiscal year, the state collected some $769 million in severance taxes from coal and other fossil fuel companies, representing 13% of the $5.89 billion in funds collected by the state."

So BlackRock is picking on one of the poorest states in the nation. Moore and the rest of state government have no choice but to fight back against BlackRock, as well as U.S. Bancorp, Goldman Sachs, JPMorgan, Morgan Stanley and Wells Fargo, 6 banks that are cutting coal companies off.

Other states are following West Virginia's lead in divesting themselves from BlackRock.

Fox reported, "Missouri has pulled $500 million in state pension funds managed by New York-based financial institution BlackRock over the company's environmental and social priorities.

"Missouri State Treasurer Scott Fitzpatrick announced Tuesday morning in a statement first provided to Fox Business that the Missouri State Employees’ Retirement System, of which he is a member, sold all public equities managed by BlackRock. With the announcement, Missouri joins a growing list of Republican-led states who have quit BlackRock and other banks over their environmental, social and governance (ESG) initiatives."

$3 billion is nothing. It is 3% of 1% of $10 trillion.

It is 30 cents interest on a thousand bucks.

But ticking off the government is bad for business.

Stacey Lennox reported, "Larry Fink is having a bad year. Some estimates place investments withdrawn from BlackRock, the firm where he is CEO, at nearly $3 billion just from states pulling treasury funds due to Fink’s public political agenda. In the second quarter of 2022, BlackRock exceeded average market losses, with assets under management falling 22% to $8.5 trillion. Third-quarter assets under management fell another 15%, with adjusted earnings down 12.8% and revenue falling 15%."

Looks like that rubber tree plant just moved.

The Epoch Times reported, "BlackRock’s focus on the latest Wall Street craze—environmental, social, and governance investing—has turned into a risky affair for the world’s largest asset manager, a UBS analyst recently stated.

"Brennan Hawken, an analyst at the bank, downgraded the stock of BlackRock, Inc. from Buy to Neutral and slashed the stock price target from $700 to $585 over growing pushback to its ESG efforts."

I love it.

In response, the company tweeted, "BlackRock has built its business on providing our clients choice which align with their unique goals and preferences. While the actions of some elected officials have attracted media headlines, they do not reflect the totality of our clients’ investment decisions.

"For example, clients have awarded BlackRock $248B of net new long-term assets this year, including $84B in the third quarter in the U.S. alone.

"We remain committed to offering our clients choice and helping them achieve financial outcomes consistent with their investment goals. This extends to proxy voting where we believe every investor should have easy and efficient options to participate if they choose.

"We launched BlackRock Voting Choice twelve months ago and today it represents one of the broadest programs on the market, available to all U.S. public pension plans."

Translation: We're bigger than you.

The rubber tree has spoken!

***

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36 comments:

  1. Replies
    1. "$3 billion is nothing. It is 3% of 1% of $10 trillion." Black Rock is leveraged (indebted) to the moon. Skimming and Churning depends on someone putting equity at risk, and Black Rock wouldn't exist without the Fed's "Too Big to Fail (Jail)" card.

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  2. “There is irony in BlackRock reducing its investments in coal, a mineral that some of us mistakenly call a black rock.” There’s even more irony in the fact that Black Rock is co-opting a Woke tactic to harm the electric car owner which, more than likely, depends on coal power.

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  3. Black Rock stepped in it big time. They like a lot of other institutions are discovering that Americans fight back.
    2DC

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    Replies
    1. Remember "Bad Day at Black Rock", starring Spencer Tracy?

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    2. Has Black Rock given any thought to what happens to their Chinese investments after Communist China Invades Taiwan and Red China becomes a Pariah State?

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    3. Great movie. Simply entertainment with a morality lesson

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  4. Probably a good thing you folks in WV got your money out first. Go Work, Go Broke is a reality in this time, and the last folks to take their money out may not get it all.

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  5. I dare anyone to predict what living in the US will be like ten years from now.

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    Replies
    1. I will... it'll be less free, less prosperous, and less secure.

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    2. Randy says: If Trump or DeSantis is not President in 10 years, we’ll all be saying “Shì de zhǔrén” (Yes, massa) to our Chinese overlords.

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    3. Spare us the FUD, Jeffery. We all know the Democrat party is done in this country for at least a generation, just the way it was after the 60s.

      Maybe longer.

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    4. The push back is just starting.
      Time to take some short positions.

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  6. Randy says: BlackRock obviously doesn’t need WV’s lousy $20mil, or Missouri’s lousy $500mil, just like Bed, Bath, and Beyond doesn’t need lousy customers buying MyPillow, Disney doesn’t need lousy straight folks and their kids, and Ulta doesn’t need lousy women buying their cosmetics.

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    Replies
    1. BOOM.....you covered most of the recent bases

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    2. One thing is for certain whether they need us or not WE DO NOT NEED THEM!

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  7. Good column, Don. I hate these ****ers. They deserve everything they are going to get, gooder and harder. They are anti-capitalist, which is ridiculous for an American corporation. I am cheering for the little guys (ants) against the rubber tree. I love oil, gas and coal. We wouldn't have the standard of living we have without it. Let's hear it for your state for taking on a Goliath!

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  8. The name Black Rock doesn't come from coal it comes from a meteorite.

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    Replies
    1. I thought it came from describing an Afro-American gentleman's pe... Oh, "Rock"!!! Never mind.

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    2. I thought they meant the black rock the muzzies worship...

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  9. EN2 SS says;
    The states fighting back against the fascist black rock should make it illegal for them to operate in the individual states. If these scumsuckers think (and do) control like they want, the government should show them real power, "you F with us, you won't operate in any area we control, get out of our state and don't come back."

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    Replies
    1. Absolutely true. I just hope riley moore has been in contact with other red states besides Missouri to do the SAME as he did! Imagine selling out your own nation to do business with communist china!!! When did these people supposedly american, go nuts? I know, money talks. Once again the old saying goes: "If america ever falls, it will collapse from within". Dunderheads like black rock will be leading the way. Hope they go bankrupt!!

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  10. The C-Suite inhabitants of these woke corporations should be forced to live the woke lifestyle they are publicly support. If not, they should be fired. I would be willing to bet it all that not one of them lives they way they are demanding their organizations and customers live and act.

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  11. Lefties chortled what Conservatives would do since we don't protest, riot, murder, or cancel.

    We divest. We find another way to get what we need. We've certainly found a new place for sheets and stuff.

    Can we call this a Bad Day At Black Rock?

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  12. Just watch how fast Blackrock folds on all their "phony morality" The screw is turning on make believe ESG.

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  13. Blackrock owns a lot of residential real estate. Not long before they unload this investment to avoid the optics of eviction and it becomes their new calling card.

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  14. "We remain committed to offering our clients choice..."

    The choice appears to be "take it or leave it."

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  15. Moore said, "Any company that thinks Communist China is a better investment than West Virginia energy or American capitalism clearly has a bad strategy. We will continue to give our state’s business to people who aren’t simultaneously trying to destroy our economy." #WINNING

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  16. Riley Moore is Arch Moore's grandson. Looks like a chip off the old block.

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  17. This is so good, I came back to read it twice.

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  18. BlackRock spends, I'll take a guess, $50,000,000 a year on "public relations."

    All that and they can't find literate adults to represent them.

    It's bad enough that what follows is $1.99 boilerplate copied and marked up for suckers.

    Worse, Black Rock execs apparently can't even read what they hire other people to write. Otherwise, they'd know that ---

    "In response, the company tweeted, 'BlackRock has built its business on providing our clients choice which align with their unique goals and preferences.' "

    --- Should be: "... on providing our clients CHOICES which..." (PLURAL).

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  19. Blackrock’s political power partially comes from mutual fund shareholder votes they vote with money from 401k and pension plans. If ERISA was amended to make plan sponsors responsible for the votes a significant amount of Blackrock’s leverage would be eliminated.

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  20. This is exactly the kind of investment pandemic that should infect every State in our nation. Cancel Blackrock and perhaps Vanguard and State Street and every other firm who places their Ultra Green Neo Marxist political agendas ahead of their fiduciary responsibilities to their investors. Pull out all of the public retirement accounts and 401k's. The world needs on demand sources of energy that deliver after the sun sets and the wind ceases to blow.

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  21. What did you expect with a Fink at the top?

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