The Shadow King Of Wall Street: "Markets Like Totalitarian Governments"

Tyler Durden's picture

Wall Street's shadow king, Blackrock's Larry Fink who manages over $3 trillion, and is the world's biggest asset manager, appeared on Bloomberg TV in an interview with Erik Schatzker, and the first thing he said is that the "market likes totalitarian governments." That one statement explains everything one needs to know about the market performance over the past two years: there has hardly been a time in the past century when all the globalized regimes supporting stock markets and asset prices have been more "totalitarian" by Fink's, or any other definition, than they are now. And while the plutocracy may welcome the advent of the Communist States of Iosif Vissarionovich Bernankestein, the common folk, as they always do, ultimately revolt violently against any such attempt at supreme government. Zero Hedge regular Mike Krieger was quick to proclaim his condemnation: "This is how these elites think.  Even if markets did like totalitarian governments HUMANS DON’T.  This guy is pure scum and is exactly what is wrong with America and its policy today.   This is also the guy that told us to buy dollars and treasuries yesterday…" But such are the ways of a dying ponzi regime. Everyone knows the end is coming and is inevitable. And while Wall Street's self-anointed masters of the universe believe they will be able to avoid the ultimate unwind, they are wrong. Just like Gaddafi is finding out first hand right about now.

Full clip

And a summary of Fink's entire 15 minute interview:

Larry Fink on the markets today: 

"I believe the market has shifted from euphoria, from August through late January and now we are at a moment of reflection. I think this period of reflection will be sustained for some time."

Larry Fink on whether he is a buyer or seller:

"If you believe that markets are efficient, some of that uncertainty has been priced in already. We’ve had an increase in oil; there has been no increase in demand in oil. It is that risk premium that has been priced into the marketplace. We’ve had a reduction in equity prices worldwide, especially in the emerging world, where everyone was so bullish one year ago and now money is being poured out of it. "

"If you believe that all this noise, uncertainty will produce a better outcome, it is probably a buying opportunity. If you think the noise will create a more troublesome world, it may cause some developed economies to revert back into a recession, then we will have rough going for the next year."

"I am more in the camp that this uncertainty will create a great amount of volatility, the marketplace is pricing this in, and if the market has a setback in terms of prices, I would be a long-term buyer."

On Treasuries:

"I don't think an 80 basis point increase in interest rates is a bear market. We have a possibility of rising rates. The outer limits could be 4.40%, on the ten-year. The market knows that the Federal Reserve will be completing its QE2 program by June. The markets are efficient. A lot of this is priced in."
"We believe rates will creep up. We're not calling that a bear market. The other issue we need to focus on…We all spend time focusing on the Treasury market but in the United States, we've had a collapse in the outstanding of debt.  Corporations, individuals have really pared down their debt. The amount of outstanding debt in America has shrunk…You cannot look at just the Treasury market alone. If you encompass all the cash sitting on the side and you look at how much debt reduction we have seen in the credit markets, I believe there will be a ceiling of how high rates can go. What can throw that out is if we start experiencing a persistence in inflation…If you believe we will have creeping, rising inflation over the next two years, of course interest rates will have to go higher."

"Inflation will be more moderate. Until I see a labor market that is more robust and until I see factory utilization to be larger, I think inflation in this country will be more muted than what we see other countries."

Larry Fink on whether he is a buyer of Treasuries:

"If rates creep up over 4%, I would be incrementally buying interest rates.”

"I would definitely be lengthening [duration]. I believe inflation may be a problem in the short run but in the long run, not. You would want to buy if the yield curve shifts upward on the longer end and take advantage of that. If your views of inflation is short, the long end will do the best."

On European sovereign debt crisis:

"I don't think [the European debt crisis is over].  I think we will have more volatility there. We still have not addressed the Greek problem. We are in the midst of reviewing what is happening in Ireland. We still have the banking system in Europe which is undercapitalized. You had the governor in Italy saying his banks need more capital. Spain and other countries are saying their banks may need more capital. You put this idea in, the need for more capital to the financial system plus the sovereign credit difficulties, which would probably cause a reduction in capital. We will still have more volatility out of Europe. It will probably be a negative trend."

"I'm a big buyer of the U.S. dollar here."

On reports that BlackRock is teaming up with KKR, Warburg Pincus, and others to buy Citi Financial from Citigroup:

"I don't comment about market rumors…I will say, we do a lot of things for clients….Yes, we are not getting into the consumer-lending business. One should assume that if we are involved in this, it would be on behalf of clients, not for our balance sheet."

On BlackRock making deals:

"It is not our intention to do another large deal. I don't see a need for it. Whether regulators are inhibiting us or not, we have said publicly we are happy with our business model as it is today. We made to fill-in acquisitions in different countries or may do an acquisition for the BlackRock technology business, BlackRock Solutions. But it is not my intention to be doing anything large-scale."

"I remind people and regulators that 100% of our business is a client-serviing business. We are in agent in all our businesses. This is not our capital. This is not our balance sheet. We don't have leverage. What caused the credit crisis was leverage. We are a different animal. We are only an agent."

On the Middle East:

"Saudi Arabia is probably the most troublesome country to answer. I think the government will manage the situation properly. They have offered a big infusion into the economy. It is a very wealthy economy with huge oil reserves and huge reserves. It is a very large population in the Gulf region. It is the largest population in the entire Gulf region. That is what produces the uncertainty. The world is dependent on their 8-9 billion barrels per day."

"That is an uncertainty we have to factor in. If there is uncertainty around Saudi Arabia that produces a slowdown of oil production, then we will have severe issues in this world. That is probably one of the most difficult issues that we are facing today.

"In the short run, you could see oil prices going north of $150 if you had that type of oil shock. It could be $200 at any one moment. My view would be that this would be managed over a course of a period of time."

On China:

"They are more uncertain. They are the biggest producer of products in the world today. We're very much dependent on China. It is a similar way we are dependent on Saudi Arabia for oil."

"I am very concerned about China. China has done a magnificent job about engineering its economy…They have 300-400 million people living at substandard levels. They are in the outer regions outside the river delta valley. They are in many ways minorities and Muslims. They want change…China, because of the size of its population and because the imbalances of standard of living in the country, is an issue. They have done a good job of navigating this but we should put that in as a factor of risk going forward.

"I am more worried about equities today because of this uncertainty. Five-six months ago, I said our economy is better than we thought it would be. I would argue today that we think the economy is better today than it actually is. The enthusiasm has increased dramatically. I think the market is pausing. We need to see how this all plays out. I am quite constructive on Northern Africa, that this will be played out in a positive way. In the short run, democracies are dirty and messy and we could see moments of time in which that uncertainty is a negative uncertainty."


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Cognitive Dissonance's picture

Sociopaths love totalitarian governments too. Larry Fink is a sociopath.

Misean's picture

Be careful, insulting sociopaths can be hazardous to your health.

Cognitive Dissonance's picture

Actually they consider it a compliment and even high praise. 

The peons love me, but they also fear me. Ain't that sweet.

Misean's picture

As a fellow sociopath, I am insulted to be included in the company of Fink...just sayin...

Trundle's picture

A buttery personage, he may well one of the first to be eaten if the "eat the rich" meme goes full circle.

Hook Line and Sphincter's picture

When the sociopaths are crossed (for such offenses as...stepping on their big toe), you can expect an eye for an eye to be thrown out the door and quickly replaced by a toe for your life. Get in the way of this mans Will and most will end up as the meal (see turkey above).

BigJim's picture

This guy is the epitome of conventional wisdom, and may well be a sociopath to boot, but when he commented that 'markets like totalitarian governments', it seemed to me he was just making an observation apropos market volatility, rather than making a moral judgement.

Or did I miss something?

milbank's picture

You are totally correct Big Jim as is Fink.   That "Tyler Durden" doesn't recognize what Fink said regarding Totalitarian governments and the markets is why Zero Hedge has been self-righteously losing money for anyone who follows "Tyler Durden" commentary as a guide to trading.  The board commentary deriding Fink are from losers both psychologically as well as monetarily. If you don't believe it, look at what the market has done in that last two years as "Tyler Durden" and Zero Hedge have done their "thing." 

Losers lose, Winners win in the markets arena.

Dat's that fact Jack.  No amount of impotent whining or anti-semetic, redneck rhetoric will change it.

GoinFawr's picture

My my, isn't somebody sensitive...

 Erm, last time I checked, TD was loooooong physical gold and silver the last two years; how do you figure anyone lost money on those two B(note the cap)ullmarkets? And that's not even to mention those ZH'ers with the cajones to throw fiat bux at choice miners of the same over the same timeframe, using the proceeds to possess even more OZ's. Hunh, looks pretty win-win from my perspective.

And that's the fact jack.

But by all means, 'buy the dollar' like Mssr.Fink says, milbank. Say, how has that trade been doing over the last two years? I guess it's off the lows, for now: congratz! Then again, against real (currencies) like Ag and Au- ouch!

Bonne Chance!

As for the rest, well commentors can only speak for themselves, hmm? 'Good with the bad' when it comes to a 'speak easy', no? It seems to me that anything worth defending usually is, and vigourously; not to you?

But I challenge you to find me one article submitted by TD that fits into those other categories you mentioned....

<steels self>

BigJim's picture


I've made more money trading since I've started reading zerohedge.

And though they're clearly anti-zionist (as is anyone with any knowledge and sense of ethics), I have yet to see an anti-semitic article.

IQ 145's picture

 double plus one. Me too. I watch with the sound off; and just let my life experience speak to me; this guy is a professional bullshit artist who thinks he's cute. Makes me slightly nauseous. Good reason to short the Long Bond.

hbjork1's picture

You don't even have to insult them.  Simply being around, effective in your work and popular with other employes may make an employee a target.  Such people may not be fully controllable in a pinch. 

alien-IQ's picture

who here would not be happy to pay any price to have 15 bare fisted fight club style minutes with that man?

I'd happily offer 15 oz. of Gold for the opportunity.

Gold 36000's picture

I would love to have a go with him.  He looks and sounds like a real pussy.

Hook Line and Sphincter's picture

15 minutes? Where is your efficiency?

2 seconds he has a broken nose from a head-butt, 1 more second to a choke hold, 15-30 sec until he's out, 10-20 seconds of 'curbing' his passed out ass...shoe against his head/teeth against the curb.

Shylockracy's picture

My time frame is 3 rounds of 3 minutes (olympic taekwondo). I'd be happy to meet him for 30 sec. in a ring. More would be just pleonasm.

kita27's picture

this interview wasted 5 minutes of my time before i could listen no more.

Mr Poopra's picture

Nice of Larry to take time away from feasting on unicorn blood and children's tears for a quick interview.

The Axe's picture

agree....Elite scumbag.....Let them eat CAKE!!!  cocksucker

ReallySparky's picture

Down with Totalitarian Governments.

Zero Govt's picture

that'll be every one in the western world then ....can't imagine these global elite corporations dealing with any Western or Eastern Govt notices any difference  ..."Which offshore bank account would you like your brown envelope in Minister?   

Also Fink says, "Whether regulators are inhibiting us or not, we have said publicly we are happy with our business model as it is today."
I believe Blackrock is one of the the parties including JPM behind iShares. He claims his business is just an "agent" for the investors but iShares is a shell.
This ETF vehicle is so shelled (hollowed) out even the Silver in SLV has zero liability on testing or knowing what the Silver is behind their ETF.
Amoung a host of other dodgy statements in this SLV ETF Blackrock appears to be an "agent" of buying something that looks like a whole lot of fuk all... I'd say that puts Fink in the Madoff category of doing business so where does he get "regulators are inhibiting us" from???

GNandGL's picture

No surprise here.  Keynes admitted that his economic policies were more suited to totalitarian regimes than democratric ones. 

Lord Welligton's picture

Got link old bean.

Much obliged.

packman's picture

I wouldn't mind seeing and explicit quote either - but it only makes sense.  His whole life's work was advocating managed economies.  What easier way to manage the economy than with a totalitarian political system?  The two not only go hand-in-hand, but are essentially the same thing.


Lord Welligton's picture


And rather the point.

And also the essence of "Central Banking".

The control of aggregate demand.

For whom?

The people or the bankers?


Misean's picture

No problemo.

"Keynes himself admired the Nazi economic program, writing in the foreword to the German edition to the General Theory: "[T]he theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under the conditions of free competition and a large measure of laissez-faire.""

Lord Welligton's picture

Much obliged.

You are a gent.

Cognitive Dissonance's picture

So the police state is just a means to the end of keeping the Ponzi going? I knew I liked these guys.


Lord Welligton's picture

Can't disagree with you there.


Lord Welligton's picture

May I respectfully suggest the opening of the interview.

@ 00:16

"Larry I feel like we're twins today"

People will have taken that as Larry and the Interviewer (who does not give his name) are both wearing lilac shirts and ties and charcoal grey suits.

I did not.

I took it the Bloomberg and Blackrock are twins.

Am I suffering from Cognitive Dissonance?




Cognitive Dissonance's picture

Yes. And no. :>)

I see it as a manifestation of the interviewers Stockholm Syndrome. He's telling his sociopath tormentor "See, I'm just like you. I can lie, bullshit, misinform and use subterfuge and innuendo with the best of the sociopaths. I've been studying nights and weekends so don't hurt me. I'm one of your kind. I'll do anything you tell me to do only stop beating me."

When the mind can no longer resist the agony it attempts to be just like the tormentor/abuser in order to hide within the herd. Chameleon is the last stage of capitulation.

In many ways corporations do the same thing when in the presence of a bigger swinging dick.

Lord Welligton's picture

I think yes and yes on that.

Though that does not dissemble my "twin" analysis of Bloomberg and Blackrock.

As corporations I, now, for the first time, know that Bloomberg and Blackrock (they being corporations) are not mere relatives. They are twins. I suspect further that they and other are clones (that would be as corporations).

For the two individuals, I am not sure that they see it.

One knows he is The Prince. The other knows he is a courtier.

Having said that.

It is truly disturbing that the manager, as he points out, of pensions of Police, Teacher, Nurse etc, educates them to allow him, The Prince, kill for their pensions.

I am very disturber by Larry Fink.

I don't want Blackrock managing my pension.


IQ 145's picture

 They could have worn the same old school tie; but I suppose even Americans might have got that.

Misean's picture

Couldn't exist without it. Why, Mr. Ponzi's own scheeme was based on arbitrging the postal organs of various global police states.

Pladizow's picture

Has there ever been a banker-centric serial killer?

Sudden Debt's picture

Let's look into Russian and German history for that one...


LeBalance's picture

Pardon the droll comment:

"So you read here at ZH everyday and you don't know their names already?"

There's Paulie and Alan, Fischer and Blankfein, ....

But the most famous mass murdering inflationista of ALLLLLLLL......

Bennie The Inkjet Bernank had a printer on nitro-meth,

And everytime he goosed it, Arab states erupted in death,

All of the other banksters, were completely green in envy,

They wanted to help our Bennie foment the world's war games.

La? La? La?

Pladizow's picture

My comment asked if there was ever a banker-centric serial killer, i.e., a killer whose sole focus was the extermination of bankers - NOT - if there are bankers who are serial killers, that answer is obvious.

Gold 36000's picture

Hopefully by naming names here perhaps there are a few brave souls willing to take a stand.

palmereldritch's picture

Yes there is.  To date it has been old age.

camaro68ss's picture

The zombie Apocalypse is near

Arthor Bearing's picture

Self-satisfied smug little shit banksters like Fink won't know what the hell to do when they're faced with the reality of what they've done. God willing they'll be trapped on the island with nowhere to run and no hope of rescue

BobPaulson's picture

Won't need to know what to do while hanging from a lamp post.

10kby2k's picture

He rivals Bernanke in dorkiness.

BobPaulson's picture

Remember: you make the most money in a Ponzi scam right before the very end. 

Andy_Jackson_Jihad's picture

Cool catch phrase but hardly accurate.  If making money in a ponzi then by definition it is expanding and thefore not near the end unless it spreads like a virus on a petri dish - growing exponentially until there is no new host then collapse.

On second thought, you're right.

InconvenientCounterParty's picture

"market likes totalitarian governments."

I think ZH'ers get this for the most part. I'm a little surprised no one is promoting the idea that the U.S. is supporting the regime in Lybia. Motive, opportunity, economy element of surprise. GW?.... any one on this?