"We're Living In A Gambling Society" BlackRock's Larry Fink Urges CEOs To Stop "Short-Termist" Thinking

Tyler Durden's picture

As the ongoing collapse in economic productivity continues in America, and Alan Greenspan's concerns grow, the call for an end to the diversion of corporate spending to instantly shareholder-friendly actions comes from an unusual source. Larry Fink - CEO of the largest asset manager in the world - has unleashed a letter to 500 CEOs around the world  - telling them that "the effects of the short-termist phenomenon are troubling both to those seeking to save for long-term goals such as retirement and for our broader economy,” bucking the dividend/buyback trend that investors are demanding. As NYTimes notes, the shortsightedness that pervades corporate America is just a symptom of a larger issue. "This is not just a corporate problem," Fink explains, "It's a societal problem, we’re currently living in a "gambling society."

 

Larry Fink's Letter... encouraging a focus on long-term growth strategies...

Dear Chairman or CEO,

 

As a fiduciary investor, one of BlackRock’s primary objectives is to secure better financial futures for our clients and the people they serve. This responsibility requires that we be good stewards of their capital, addressing short-term challenges but always with a focus on the longer term.

 

To meet our clients’ needs, we believe the companies we invest in should similarly be focused on achieving sustainable returns over the longer term. Good corporate governance is critical to that goal. That is why, two years ago, I wrote to the CEOs of the companies in which BlackRock held significant investments on behalf of our clients urging them to engage with us on issues of corporate governance. While important work remains to be done, good progress has been made on company-shareholder engagement. I write today re-iterating our call for engagement with a particular focus on companies’ strategies to drive longer term growth.

 

Many commentators lament the short-term demands of the capital markets. We share those concerns, and believe it is part of our collective role as actors in the global capital markets to challenge that trend. Corporate leaders can play their part by persuasively communicating their company’s long-term strategy for growth. They must set the stage to attract the patient capital they seek: explaining to investors what drives real value, how and when far-sighted investments will deliver returns, and, perhaps most importantly, what metrics shareholders should use to assess their management team’s success over time.

 

It concerns us that, in the wake of the financial crisis, many companies have shied away from investing in the future growth of their companies. Too many companies have cut capital expenditure and even increased debt to boost dividends and increase share buybacks. We certainly believe that returning cash to shareholders should be part of a balanced capital strategy; however, when done for the wrong reasons and at the expense of capital investment, it can jeopardize a company’s ability to generate sustainable long-term returns. We do recognize the balance that must be achieved to drive near-term performance while simultaneously making those investments – in innovation and product enhancements, capital and plant equipment, employee development, and internal controls and technology – that will sustain growth.

 

BlackRock’s mission is to earn the trust of our clients by helping them meet their long-term investment goals. We see this mission as indistinguishable from also aiming to be a trusted, responsible shareholder with a longer term horizon. Much progress has been made on company-shareholder engagement and we will continue to play our part as a provider of patient capital in ensuring robust dialogue. We ask that you help us, and other shareholders, to understand the investments you are making to deliver the sustainable, long-term returns on which our clients depend and in which we seek to support you.

*  *  *

With Economic Productivity on the decline...

 

 

as corporate spending is diverted to Buybacks...

 

And corporate executives are selling their own stock in record amounts...

 

Maybe what Fink should have said is - stop abusing stakeholders for the sake of your own enrichment.

*  *  *

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Radical Marijuana's picture

The American, and global, political economies are the victims of what amounts to a globalized HOME INVASION due to the biggest gangsters, the banksters, capturing more and more control over governments. After privately controlled banks gained the power to control the public "money" supply, big corporations grew up around those banks that had captured control over the public "money" supply.

We live inside something that is way worse than merely "gambling society." We are FORCED to live inside of systems that operate through FUNDAMENTALLY FRAUDULENT FINANCIAL ACCOUNTING. That is as if, for generation after generation, people were BORN inside of a gambling casino, where the society that they were born into was run by the biggest gangsters, the banksters, who had captured control over governments, in order to enforce their frauds. AFTER there is established the MAD Money As Debt system, whereby privately controlled banks get to make the public "money" supply out of nothing as debts, EVERYONE IS FORCED TO GAMBLE!

There is no way now to get out of the gambling casino that controls the world! Instead, inside of the established MAD systems, people tended to be more successful by participating more in that MADNESS. There is a de facto cascade of organized crime controlling the political economy, which drives a series of perverse incentives. The article above reviews some of the results of those perverse incentives. However, I do not notice anything directly addressing the core issue, which is privately controlled banks being able to create the public "money" supply out of nothing as debts, while that fraud is enforced by governments.

Overall, people tend to regard the political economy backwards. Or, they are like a group of blind men, each touching a different part of an elephant, and then concluding that that elephant as whole is like the part that they personally touched. The overall realities are that money is measurement backed by murder, because the production of destruction controls production.

Those who prefer to believe that the economy is based on production tend to be ignoring the bigger picture! A deeper analysis concludes that human beings are entropic pumps of energy flows, that operate according to the principles and methods of organized crime, basically as systems of lies operating robberies. Thus, the political economy IS a gambling casino, effectively controlled by the best organized gangs of criminals, who have captured control over the powers of governments, so that governments act as those organized crime gangs' goons, to enforce their frauds.

The deeper problems are that is necessarily the case. There are no ways for it to actually be different. Therefore, while most people to not understand, & do not want to understand, the bigger picture, those few who partially do then still want to promote impossible ideals, based on false fundamental dichotomies, regarding what the economy should be.

We are born into a gambling casino, controlled by organized crime, and therefore, the systems of incentives reward those who adapt to those social facts by gambling. The only realistic resolutions to those problems would require better organized crime, in order for there to be better government. However, actually, the political economy has become more and more unbalanced, rigged markets, due to the ways that the political economy IS a gambling casino!

"A focus on long-term growth strategies" could be more realistically developed as the evolutionary ecologies of systems which engage in the entropic pumping of energy flows. However, by and large, those deeper realities are not recognized, or partially perceived in backward ways, by the vast overwhelming majority of people. The debt controls ARE backed by the death controls, as flows of energy come from the environment and return. At the present time, the established political economy operates through fundamentally fraudulent accounting systems, which means that everyone is living inside of a gambling casino, and are forced to operate by more and or less gambling in that context of profoundly rigged markets. Moreover, most people only see a small part of that bigger picture, and therefore, do not perceive how and why the real world actually operates, and must necessarily operate, according to the principles and methods of organized crime.

Meanwhile, the best organized gangs of criminals continue to get away with their established enforced frauds more and more, while the vast majority of people provide no effective resistance to that, especially since most of the little resistance that is publicly significant attempts to promote the impossible ideals that the world should not operate according to the principles and methods of organized crime because production is controlled by destruction.

The vast majority of people have no mental tools to enable them to move beyond the dualities of false fundamental dichotomies of production versus destruction, in order to better understand the unitary mechanisms regarding how the same energy flows through both. The article above appears to be like that, inasmuch as it recommends impossible ideals should be actualized, in ways which seem to deliberately ignore what the deeper problems are, and why those problems exist, namely, that we DO live in a globalized gambling casino, and so, we’re currently living in a "gambling society."

That apparent gambling society is due to the real human world actually operating according to the principles and methods of organized crime, in ways which dominate everyone's lives, to such a total degree that most people do not understand that, because they do not want to understand that, including that most people who propose bogus "solutions" to those problems, because they refuse to consider what it would fully mean IF the financial accounting systems were made more completely consistent with general energy systems. There are some who superficially suggest that the monetary system should go back to being consistent with the principle of the conservation of matter. However, I am not aware of anyone who is publicly significant who rigorously promotes developing a monetary system which is consistent with general energy systems and the principle of the conservation of energy.

Of course, the existing systems ALREADY actually do that, but they DO THAT by operating as enforced frauds, wherein the vast majority of people are not aware of those frauds, while the few that do recognize those frauds then do not appreciate the deeper reasons regarding how and why those kinds of enforced frauds actually totally dominate the established political economy.

It is because the real political economy is based upon enforced frauds that we are living inside of a gambling casino, or a "gambling society." For the foreseeable future, one can only expect that to continue to get worse, faster, because most people do not want to understand that, while the few that begin to do so then tend to promote impossible "solutions" which could never exist in the real world, which is what the article above did, SINCE WE ARE STUCK INSIDE OF THOSE RUTS, GOING AROUND AND AROUND AND AROUND ...

P.S.

Did anyone else also notice that all the comments under Zero Hedge articles (that had not yet been archived) during the previous several days have DISAPPEARED, or is that just some problem with my account, or my computer access?

MEAN BUSINESS's picture

failed attempt to implement new software to include reply notification options ; )  (ie: not just you)

p.s. I did reply to your solar flare coincidence comment ; )

  •  

Mon, 04/13/2015 - 19:59 | 5989017

MEAN BUSINESS

 

Vote up!

0

Vote down!

0

Moi? ; ) Here's a cartoon I'm sure you've seen before:

http://politicalhumor.about.com/od/environment/ig/Environment-Cartoons/I...

Speaking of jokes, I'm figurin' you heard about Ontario's carbon action announcement today too...

RUH ROH : )

MEAN BUSINESS's picture

..."and all your money? Won't another minute buy. Dust in the wind. All we are is dust in the wind."

As I grew older it became more obvious that money will buy an individual more time. Then when one looks at the intense focus we place on tax laws and intergenerational property transfers, it also becomes obvious that more money is not only buying the individual more time but also buying one's offspring more time potentially. Under the guise of "family values", we gamble. My Dad owned a manufacturing business and gambled that moving the head office to the big city would expand the business and ultimately bring more "money" into he family. Un-fortune-atly,  he was dealing with banks. He lost it all.

But when I first started listening to that Kansas song, mass extinction events were not part of my vocabulary. The things we do to become the big winners has led us as one together to "the point of no return"...

photographs and memories, old blog comments, children of men. Dust in the wind. Tales from topographic oceans.

"it's now or never" for that series of political miracles to occur...

Radical Marijuana's picture

"it's now or never" for that series of political miracles to occur...

 I used to believe that. However, I now think that I was mistaken.

THE MIRACLE is the existence of anything, even if it is only dreams. After the existence of "energy," all other miracles are secondary. Thus, irrational hopes for some series of possible, relatively finite, miracles are secondary to the transcendental hope that, since existence exists, the Universe as a Whole (which may include an infinite number of a Universe of universes), that Universe is already perfect.

The sublime miracle is that there is anything at all, rather than nothing. After there is anything at all, then it is no longer imperative that there be any finite miracles ... although when attached to a finite form, one can WISH for some finite political miracles, such as the series of political miracles that enough people would wake up enough to stop believing in the biggest bullies' bullshit, which is currently the banksters' bullshit, since IF enough people realized that the public money supply had been effectively privatized, merely because they were too ignorant and afraid to do anything about that, then, maybe, they would do something about that?

Meanwhile:

My favourite "prayer" is:

"Please God, thou art the beginning and ending of all things."

I like how the phrase "Please God" can be interpreted in two opposite ways, depending upon how one is looking at that. I rather think that we actually end up more pleasing God, rather than God ends up pleasing us ... But then, that relates to the first miracle that we exist, even if it is only dreaming with some data, while the secondary miracles are that those dreaming of apparent realities, that may which become more like they would like.

Again:

"What is the true unit of survival?"  Are we the ocean of energy that flows through all, or are we the whirlpool that appears to take transitory transformation through that ocean ??? I sympathize with the relative desperation, in desperate times, that it seems it would be nicer IF there was some prodigious series of political miracles, whereby enough people stopped believing in the biggest banksters' bullshit, and therefore, became empowered to create new monetary systems, which were not such fundamentally fraudulent financial accounting systems, driving apparently irreconcilable social polarization and irreparable destruction of the natural world, due to the triumphs of the currently entrenched enforced frauds controlling civilization in ways which driven that civilization toward MAD, self-destructive, criminally insane behaviors.

However, while ignorance may well be the source of suffering, and deliberate ignorance the source of the worst suffering, all of that suffering may be regarded as just another story, even when that is our story. Therefore, I no longer regard it as being so imperative that people should become enlightened. Rather, I tend to embrace the paradoxical ways that when one becomes relatively more enlightened, one recognizes that one always was. That is to say, the currently established monetary systems, no matter how depraved they may be, and no matter how desperate some people may become when struggling to survive and suffering within those kinds of monetary systems, built on enforced frauds, those systems are still parts of the whole of the overall perfection of existence, of whatever infinity of infinite universes there may be ...

MEAN BUSINESS's picture

 

 

Que sera sera <my french is terrible>? 

I guess it could be said that what we call "enlightened" is artificial because to be naturally enlightened would be simply defined as being shone upon or sufficiently bathed in sunlight. Natural selection ran the world. At the same time our artificial "enlightenment" is said to have developed by natural selection when we developed the pre-frontal cortex. We're freaks of nature!! lol But we came to build mental models and tell tales which became a successful strategy against the force of nature. Our transitory flight could be made artificially immortal, seemingly with no end. We become legends in our own minds then aim to become legends in everyones minds. Pharaohs and their pyramids, achieved via pyramid schemes (lies back by violence). And lots and lots of children...

All life is your life - that is the true unit of survival. We survived the whirlpool whereas the dinosaurs didn't but we're not quite out of the woods yet. We have created a new ocean of energy called Knowledge. Where we used to take knowledge to gain power and immortality, we are racing to put knowledge back together in order to survive. Terabyte by Terabyte, and we are gaining! 

"See through science 

Part of a back door, a door made up of doors

To an endless time

To a new world"

https://www.youtube.com/watch?v=q4KnMgNVISw

YES / Big Generator / I'm Running / 1987

p.s. (it was the best concert I ever saw, transcendental. I've never been the same since!)

--------------------

The Dawning of the Age, the realization, IS. Enough people knOw now. The only thing they can do about that is share the knowledge. We will do the rest, We The People. I'm not saying it will be easy. Remember when we used to think raising children was the hardest thing? Our new story will be replete with suffering but we will survive to tell it. Through the tears to smile again.

 

Thanks for the reply Rad :)