The BlackRock - Bank Of America Ownership Catch 22

Tyler Durden's picture

It is well known that Bank of America owns 34% of BlackRock via a legacy position inherited from Merrill Lynch, arguably the most valuable part of the business. As of today, the stake is worth around $11.5 billion. Yet what may be a little less known is that BlackRock has also returned the favor, and is now the largest holder of Bank of America, owning 5.35% of the outstanding BAC shares, for a total value of $6.6 billion. Does that mean that there is a wash in there somewhere? Who cares. But one thing that certainly is involved, is a massive conflict of interest, especially in the context of litigation. And a big question mark - to claim that BlackRock is willing to impair a nearly $7 billion investment is naive. Instead, due to the incestuous nature of Wall Street, and the cross pollination of MBS holders, is today's action merely a ploy to get some of the more "impacted" parties to promptly settle and eliminate any possible future litigation? PIMCO, for one, and the FRBNY fir another, have the most to lose if the MBS crisis escalates, and if all MBS are unwound. Which means that somehow this is simply another diversion, with the real action taking place somewhere. We hope to figure it out before everyone has settled amicably and the whole fraudclosure is swept under the rug.

Bank of America Holders:

BlackRock Holders:

Source: CapitalIQ

PS: the BLK holdings are not purely index. Stripping out index contribution still hs BLK at the top, when one removes the State Street and Vanguard index contribution.


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His Dudeness's picture

"Meet me later in the gymnasium, next to the dumbbells... you'll know me, I'll be wearing a hat."

Let them all fail's picture

Anyone notice the quick spike in SPY today?

Sure great to see after the same problem in the opposite direction AH yesterday....

firstdivision's picture

I have seen those spikes quite often on Google finance often.  I figure it is just a problem with their database, but now I am thinking there might be more to it.

Sudden Debt's picture

and it will be swept un the rug. Always been like that and now will be no different.


Cdad's picture

So many more people watching this time.  So much information out there not controlled by the MSM.  Don't see any rug sweeping.  Crooked price action, yes.  Crooked SEC-LOOK-OTHER-WAY...sure.  But no hiding under the rug.  I don't see that at all.

And so what we are talking about, in the most serious sense, is the republic, rule of law, order, facism.  These are the things we are talking about in all of this.

Either way, light is shining on it all.  And yes, we are almost certainly freakin' doomed.


Korg's picture

Doomed is right. Wait until after the election, then the real fireworks begin!

My Prediction:  In December the govt takes over Fannie/Freddie/ andTBTF banks like BOA to "solve" the Fraudclosure mess and halt the tidal wave of lawsuits. Citizens go apeshit....dollar crashes.

I am a Man I am Forty's picture're late, that's already happened.

RecoveringDebtJunkie's picture

Agreed. People are angry and increasingly desperate. The power elites sweeping this under the rug would be like Tiger Woods becoming a spokesman for abstinence and people actually listening to him. Impossible.

Nothing every gets swept under the rug anyway. Some problems may be partially covered up, but the negative sentiment just keeps on building up at an accelerated pace. We're already seeing the effects of disintegrating social cohesion.

HarryWanger's picture

Agreed. Been my feeling since the story "broke". Elections coming, you won't hear about this much longer.

Cdad's picture

I see.  Could not disagree more.  But I'm sure you are next going to say "apple" which makes you freakin' irrelevant as far as I'm concerned.

Just wondering...did you see your rally end today?  I did.


HarryWanger's picture

Where you been? I haven't been long AAPL for a long time now. Sold at 289 in late September as I noted on this site at the time I sold. 

Regardless, this will go away with a whimper. Even ZH is now seeing that judging from the end of this post.

Cdad's picture


Where have I been?  Here...reading your posts along with everybody else's posts.  As for your position...I have no idea...but earlier today you were talking about dip buyers on aapl.  Is that really what you saw?

I saw a bounce...met with f'n desperate sellers.  To each his own, I guess.

But what is your question?  Are you denying that you constantly post AAPL?  Seriously?  Shall we link your constant aapl posts?  Do you think I have the memory of a gold fish?

I am new here...but I'm not stupid.

Arkadaba's picture

Sorry Cdad I have to stick up for Harry. (OK - that just sounds wrong but ....)

He is one the few commentators that came and saw and was conquered. Which is a huge - so many won't make that change regardless of what reality throws in their face.

Yep, still talks about AAPL a little too much but understands there are dislocations in the market. And by playing day-to-day, guessing he has made out ok.




Bob's picture

Found this on another thread:




Based on alleged insider reports.  Interesting if BAC was selected as the bad bank fall guy.  If the public were to feel sympathy for any bank, would it not be the "Bank of America"?  Kinda pulls at your patriot strings, doesn't it? 

I don't think there's gonna be any TARP for anybody, just sayin'. 

HedgeOn's picture

So BAC is the "bad bank" like the RTC for the failed S&L's?  This is how it's supposed to get done?  And Gross loads up on the toxic mortgages weeks before so he can pull down some more return while he shivs BAC stockholders in the process.

bob_dabolina's picture

This is how it gets settled.

$65 million dollar fine to banks. Thats just how shit rolls nowadays.

Rainman's picture

Let's just call it the WrapAround Boogie.

Oracle of Kypseli's picture

Keep and eye on the left hand. The artistry of deception.

knukles's picture

Absolutely, positively must be a deception from where the real money lies; else the VampireSquid would be right there at the front of the line already taking its turn cornholeing  the poor bastard bent over the fuck your buddy stump.

Holy Jesus.  Amazing visuals.

Bob's picture

Agreed, that was good.

I am a Man I am Forty's picture

Something doesn't make sense here, where is GS?  They brokered a ton of these mbs's.  They must be the innocent conduit.

LMAO's picture

Yep, that's the real stinker!

It is not even remotely possible that GS is not the architect of this new ploy to scam. All the actors are on stage but what about GS? There's some movement behind the curtains but I can't figure it out just yet.

I guess we have to wait for the final act upon which the director of this play steps forward to receive a standing ovation from the FED, WS and the rest of the racket.


Geoff-UK's picture

House Bill 4502, Creation of Government-Sponsored Enterprise to Provide Title Insurance, "Bank Reserve for National Title Insurance for Mortgages" Association:

aka creation of "Barney Mae" GSE

Saddle U.S. taxpayers with the liability of clouded titles = problem solved!!!

Logans_Run's picture

Isn't that the Barnie GAE--government appropriation and extortion?

Miles Kendig's picture

The big hole is the mortgage insurers who look far worse, and systemically far more important to the continued operation of the GSE's and the housing market ponzi than the monolines ever were to Wall Street or the muni market. Since the MI's are going down the fed needs to bring these functions directly under its direct control.

Especially with the access under law the MI's still enjoy.  Can't have that kind access, paper trail and institutional knowledge floating around unattended..

SteveNYC's picture

I'm thinking more along the lines of:

1) Scare people again

2) TARP2 / QE2 force-through attempt


Not sure it will fly this time though.

Cdad's picture

Yep...I can see the attempt.  But I don't think it will fly...not without extreme damage and public chaos.  The forces involved will not want to take that damage.

More likely money printin, dollar weakness, MBS support via the Fed....and AMERICAN RAGE THAT FINALLY CRASHES THE GATES OF THE FEDERAL RESERVE BANK!  And that would be worth the pain of the chaos...for we would be free [more free] from this monster.

This is the real issue...uncle Ben.  Good grief.

CU1981's picture



Welcome to the Asylum.

Cdad's picture

I thank you for your welcome.  Where is the meds cabinet?  Chop, chop...I am losing it quickly.


Did you see Lockhart this morning?   


ReallySparky's picture

I had two family members call today and ask, "What's going on with the Markets?".  (BTW, I told them to get out of the markets months ago.) I agree on the fear issue, however Tyler does bring up an interesting point regarding with respect to the real story under all this.  I am sure we will find out shortly after the elections.

Cdad's picture

Yeah, I have no clue about your comment or his, about the "real story."  I think the real story is laying right there, in the light, full on.  It is the incestuous nature of Wall Street. 

Listen, we all know now how this freakin' ponzi scheme works.  It [Wall] is on both sides of all trades, and it moves, by degrees, against the herd...when it thinks that is the best bet.  So the banks are being crammed down by today's headlines.  So let us call it...accumulation.  It has great tricks and techniques..and we can see them transacting where Average Joe cannot.  We see the rules being violated.  Just check your SPY charts tonight.  Million dollar lots above the HOD.  ?  Curious?  Just using another exchange...taking advantage of the SECs lack of ability in any way shape or form...or it's lack of integrity...whichever...does not matter.

And so it is all actually much simpler for me.  Just prosecute.  Period.  Perp walks.  Not cancelled trades...perp walks.  And if the SEC cannot do that, fire the SEC...and repopulate...which brings us back to the Republic.

That is what we are talking about.  F@ck BofA!  I could care less if every branch closed.  Rather justice prevail.  The question is, are we serious about our republic.  If that is the implied question buried within Tyler's question about who or what or things I cannot see, my apologies. 

Just sayin'....

HelluvaEngineer's picture

I keep trying to subscribe to your F@ck newsletter, but it keeps bouncing.  FWIW, nice summary.


Side node - for those who complain about CAPTCHA, 16 times one equals =??

SDRII's picture

JUst go listen to the GS call and how the banks are each other counterparties re tearing up bilateral correlation trading books. Presto risk weighted assets "mitigated" If that alone doesnt tell you all you nee to know about the value proposition of this toxicity nothing will

Rainman's picture

The 2s are an odds on favorite. Lame duck critters will be compliant and exceptionally dangerous in crisis mode. They'll be looking for a real job. Google "Phil Gramm".

agrotera's picture

Seriously Steve--other than people in finance, does anyone even catch the words QE when they are reading or listening to the news? No trick question here, people don't know what is going on and frankly even if you know what is going on you can't miss the fact that it is pure and simply graft that is sanctioned by our legislators.

SO with the 9 trillion missing at the Fed ( ) and no further QE i am thinking each and every living US citizen (300,000,000) could have gotten a check for $30000 and this would have gone a long way on preventing foreclosures...

Instead we have ( )
primary dealers and their affiliate hedge funds, using the fed window
to borrow at 0.0-0.25% to make a leveraged buyout (buying tax notes across America)  from distressed owners across America-- a government sanctioned grab at the gold of the heartland…and these were the entities that were toosacredtofail and will be receiving a fresh batch of blood (another trillion$ or two) from QE2 (quantitative easing) while people are getting their overdue tax notes sold to the TBTF banks and their legal arms shark the overstressed owner with thousands of extra dollars of legal expenses to put the nail in the coffin in the idea that there is any hope for them to maintain their property.
Would it have been so bad to have been told honestly in the fall of 2008 that our federal reserve system was failed and that the treasury was taking it over to create a facility to make sure the US citizen would have no worries over their deposits, and offer a 3% refinance loan to all people who were distressed and unable to get refinancing on a loan that they probably didn't even understand to begin with?  Instead their mortgage was sold, so that later, the defrauded mortage recipient has no recourse.
in the meantime, we still have no word from the Senate about when/if S604 (a law proposed to audit the fed, will ever get heard/passed) --  Is it better that these TBTF (the anointed toobigtofail) are getting money at zero-0.25%, to buy treasuries, that, depending on their duration, earn 0.25-3.0%, then they get an extra 0.25% on all excess reserves, plus the fed earns 6%b on 1% of all excess reserves, (and their balance sheet has TRIPLED in the last two years?) and then using these huge reserves as margin to leverage 20x to buy securities knowing what the President's Working Group is planning on doing so effectively front running everyone?
I think the honesty choice would have simply saved our country--and honesty now might still save us.

agrotera's picture

Miles, you crack me up, and thank you for your sweet words!!!

Miles Kendig's picture

What can I say?  I love to watch ya play, LeBronna.  Especially since you appreciate the fun that can be had at practice.  Unlike the subjects of your commentary ... who seem to want to make a practice of outta playing their tired assed game.

All hail LeBronna!  heh  Ya, I have missed you, and I'm sure to get this welcome home outta my system soon...

Especially since we both dislike those negative waves being generated in the Vegas wave pool .. knowing that happy crappy doesn't stay there

Ya, a threefer.. I know  I know  I'll be quiet now and go back to my research before the library monitor corners ya in staff since that would be an epic waste of your time

alien-IQ's picture

I just realized why the FED is suing BAC (and probably all the other banks)...and it's not good.

This now becomes a Federal case and effectively shuts down all the investigations as well as all the charges being brought against the banks by the AG's of all 50 states. The AG's are more likely to seek criminal charges while the FED is more likely to cut a "bank friendly" deal.

The banks just won...again.

We have been hijacked.

cossack55's picture

But the FED is not an agency of the USFEDGOVT.  Kind of like the Waffen SS was not really part of the SS and never really hurt anyone.  Oh, and the Gestapo was just overdressed police.

Lapri's picture

FBI is butting in. (

Meanwhile, a federal law enforcement official says the FBI is in the initial stages of trying to determine whether the financial industry may have broken criminal laws in the mortgage foreclosure crisis.

The law enforcement official says the question is whether some in the industry were acting with criminal intent or were simply overwhelmed by events in the wake of the housing market's collapse. The official spoke on condition of anonymity because the investigation is just getting under way.

They are federalizing it so that taxpayers can bail everyone out, again.

Bob's picture

The official spoke on condition of anonymity because the investigation is just getting under way.


Just getting underway?  How have these guys been spending their time--watching B & D internet porn?


papaswamp's picture

Cannibalism...they will eat their own in order to survive.

RobotTrader's picture

Only amount of days....

Perhaps hours....

When Uncle Gorilla wakes up and decides out outright nationalize the entire mortgage sector.

Then what happens?

All those OTC Derivatives/Squared/Cubed, etc. will be vaporized and cancelled out.

And the only OTC Deriviatives remaining will be on the balance sheet of gold producers who had them foisted upon them by nefarious Canadian investment banks.

Any wonder why those horrid stocks underperform the bullion?