(Yongzhi Translation Series) 'The Rise and Fall of American Finance: From J.P. Morgan to BlackRock' — Is finance not the disease, but rather the medicine capitalism administers to itself?

In the neoliberal era, this fusion reached its zenith. Corporations hedge against exchange-rate risks arising from globalization using derivatives, finance expansion through debt issuance, and allocate capital across different business units via internal capital markets. Financialization did not erode industry from the outside; rather, industry itself actively embraced financial logic—because doing so enabled faster growth and stronger competitiveness. The author pinpoints the crux: control over capital is inherently financial in nature. All capitalists, at bottom, engage in the same activity—making money with money. Refuting Three Popular Claims The book devotes substantial space to systematically dismantling widespread criticisms of financialization from both left and right. The first claim: 'Finance causes firms to focus solely on short-term speculation, neglecting long-term investment.' The author counters directly with data: over the decades of neoliberalism, corporate R&D spending and fixed-asset investment as a share of GDP have not declined—in fact, they have risen. Total corporate profits have surged dramatically. Share buybacks and dividends have indeed increased—but only after the profit pie expanded; they have not squeezed out productive investment. The second claim: 'Financialization equals monopolization—large firms dominate everything.' The author rebuts that competitive intensity has never depended on how many firms operate within an industry, but rather on whether capital can flow freely. Finance precisely breaks down sectoral and geographical barriers, enabling capital to rapidly flow toward wherever returns are highest—thus intensifying, not eliminating, competition. The third claim: 'The state withdrew during the neoliberal era.' The author calls this the greatest misconception. The state did not step back—it merely changed how it intervened. The Federal Reserve and the Treasury Department saw their powers concentrate unprecedentedly; government spending increasingly relied on borrowing rather than taxation; and following crises, the state stepped directly into the financial system to provide a safety net. So-called 'laissez-faire' was itself a deliberately engineered outcome of state planning. Why Do the Big Three Control Everything? After the 2008 crisis, the Federal Reserve launched quantitative easing, pushing interest rates nearly to zero. With nowhere else to go, savings flooded into the stock market. Passive index funds—those that blindly purchase a basket of stocks and hold them long-term—suddenly became highly attractive. BlackRock seized this opportunity, acquiring Barclays’ iShares business. Within just a few years, its assets under management (AUM) surged by 879%, catapulting it to become the world’s largest asset manager. Today, BlackRock manages over $10 trillion in assets—and if we include assets indirectly managed via its Aladdin platform, that figure approaches $25 trillion. Even more crucially, these three giants rank among the top two shareholders in virtually every U.S. publicly listed company. Across the S&P 500, the combined stake held by the three averages over 20% for 98% of constituent firms. They literally cannot exit—because their positions are so massive that selling would crash their own portfolio values. So they adopted a new playbook: directly engaging in corporate governance, dialoguing with management, pushing reforms, and even voting against management proposals at shareholder meetings when necessary. Isn’t this precisely the same playbook used by financial capital in the Morgan era? Once again, ownership and control have merged. The Problem Lies Not in Finance, But in Capitalism Itself At first glance, the authors appear to be singing finance capital’s praises. Yet their real conclusion is stark: financialization is not the problem. All progressive proposals—aiming to 'rein in finance, restore competition, and return capitalism to its golden age'—are, in the authors’ view, pure fantasy.

BlackRock: Revenue, Performance, Acquisitions, and Price Forecasts

Source: Q4 2023 Earnings A key metric for assessing BlackRock’s financial performance is its organic base fee growth. The annualized organic base fee growth rate for the final two months of 2023 stood at 6%, indicating steady growth in fee-generating assets under management. This growth trajectory reflects BlackRock’s ability to generate consistent revenue streams from its investment products and services. Quarterly operating income provides insight into BlackRock’s operational efficiency and profitability. In Q4 2023, operating income rose 9% year-on-year to $1.7 billion. This growth signals BlackRock’s success in capturing revenue opportunities while effectively managing operating expenses—thereby enhancing profitability. Earnings per share (EPS) is a critical indicator for evaluating shareholder value and profitability. BlackRock’s EPS for 2023 grew 7% to $37.77, demonstrating the firm’s ability to convert revenue growth into higher returns for shareholders. This EPS growth reflects BlackRock’s capacity to deliver sustainable returns and create value for investors. Although full-year revenue remained relatively stable at $17.9 billion, it is noteworthy that BlackRock’s revenue resilience amid market volatility underscores its robustness and diversified revenue sources. Despite external challenges, BlackRock maintained its revenue base—highlighting its strong market position and deep client relationships. Acquisition of GIP (Global Infrastructure Partners): The acquisition of GIP represents a strategic move by BlackRock to expand its influence in the rapidly growing infrastructure investment market. GIP currently manages over $100 billion in client assets, with over $60 billion in fee-generating assets under management—indicating significant market share and revenue potential. Through this acquisition, BlackRock aims to capitalize on surging demand for infrastructure investments and solidify its leadership in this highly profitable segment. The planned integration of BlackRock’s infrastructure platform with GIP is expected to triple BlackRock’s infrastructure client assets post-transaction—to over $150 billion. This substantial increase in AUM highlights the scale of opportunity created by the acquisition and positions BlackRock as a leader in infrastructure investing. GIP’s strong track record of delivering attractive returns—and its dedicated investment in an operational improvement team—further strengthens BlackRock’s capabilities in infrastructure investing. GIP’s operational improvement team has a proven record of delivering deep value creation, generating compelling returns for clients. By leveraging GIP’s expertise, BlackRock can enhance its infrastructure investment offerings and deliver value-added solutions to clients. The financial terms of the transaction further illuminate its significance for BlackRock and its shareholders. The total consideration amounted to $3 billion in cash and approximately 12 million shares of BlackRock common stock. This reflects BlackRock’s strong commitment to the acquisition and confidence in the long-term value-creation potential of the combined entity. Moreover, the transaction structure is designed to align interests between GIP and BlackRock, with the majority of consideration paid in BlackRock common stock. GIP’s leadership will become meaningful shareholders of BlackRock, fostering collaboration and shared objectives between the two organizations.

BlackRock Inc. Acquires 829,295 Shares of Oil-Dri Corporation Of America

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BlackRock Inc. purchased 829,295 shares of Oil-Dri Corporation, increasing its stake to 5.72% valued at $84.8 million. The move follows strong quarterly earnings and a dividend increase from the specialty chemicals and absorbent manufacturer.

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