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BlackRock Responds To Zero Hedge Query On Its Italian Debt Exposure
Earlier we asked some simple questions regarding BlackRock's sovereign debt exposure. Multi-trillion asset manager BlackRock responds:
- BLACKROCK RESPONDS TO QUESTIONS ON ITALIAN DEBT HOLDINGS
- BLACKROCK COMFORTABLE WITH INTERMEDIATE ITALIAN BONDS
- BLACKROCK ENCOURAGED POLICY MAKERS ADDRESSING CHALLENGES
- BLACKROCK CHIEF INVESTMENT OFFICER RIEDER COMMENTS IN A NOTE
Hopefully this response will satisfy the market and make it comfortable with BlackRock as an intermediate-term going concern. Then again clarifications such as this one by other Blackrock professionals, namely that the market is wrong, probably will not help:
- BLACKROCK'S ROVELLI: ITALY SPREADS DON'T REFLECT FUNDAMENTALS
So, what happens if the spreads do reflect fundamentals? Will Blackrock apply Mark to Market to its Italian holdings? And perhaps BLK can follow in Jefferies' footsteps and be so kind to break down it gross and net exposure for all to see? After all, there is nothing to hide among its "nominal exposures."
More from Bloomberg:
BlackRock Inc., the world’s biggest money manager, said it’s “comfortable” holding intermediate Italian bonds as a surge in yields triggers concern the collapse of the government will force the nation to seek a bailout.
“Our view has been that a solution to stabilize European sovereign and financial markets is very far from conclusion, and thus, maintaining very nominal exposures to some of the countries with substantial refinancing needs was the right portfolio posture,” BlackRock Chief Investment Officer Rick Rieder said in an e-mailed statement to Bloomberg News.
On Oct. 13, Rieder said on Bloomberg Television’s “Inside Track” with Erik Schatzker that BlackRock was buying Italian debt given improved prospects for a resolution to the euro zone sovereign debt crisis. Italian 10-year notes, which finished today at 7.25 percent, traded at 5.82 percent on Oct. 13.
"The ultimate outcome we think is going to be constructive,” as far as European policy makers’ efforts to contain the crisis, Rieder in the Oct. 13 interview.
“We have become more comfortable with the levels of some of the debt, like some intermediate Italian bonds,” Rieder said in the statement today. “These levels will foster a greater sense of urgency towards an ultimate European solution. However, we still maintain a very conservative posture here and see a number of hurdles which still have to be cleared before growing positions.”
In a separate Bloomberg television interview on Oct. 21, Rieder said BlackRock remained a buyer of Italian government debt as European policy makers were set to gather to address the region’s sovereign debt crisis. “Italy is attractive,” Rieder said during an interview on “InBusiness With Margaret Brennan” on Bloomberg Television that day. Euro finance ministers meet on Oct. 21, followed by ministers from all 27 European Union countries the following day.
“We are encouraged that policy makers appear to be meeting and addressing the challenges implicit in some of the recent proposals, and think these debt levels require policy movement and decision-making,” Rieder said in the statement today. “We are optimistic that this will happen over time, but still think that markets will be stressed until that time comes, and thus are maintaining a very conservative posture.”
In other words, BlackRock is betting, hopefully not the house, that Italy is Too Big To Fail and someone else will not make a case study that could cost the company billions. Surely to former Lehmanite (and former vice chairman of the all important TBAC) Rick Rieder, this is prudent risk management. Unfortunately, it did not quite work out for the Norwegian sovereign wealth fund's foray into Greek "hold to infinity" investing.
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Hang them all.
BlackRock's share price does not reflect fundamentals.
But in a few days it will.
Italy's fundamentals are that their massive debt needs a 30% haircut at least to bring debt to sustainable levels in perpetuity (coverage of interest payments). That is if nothing else happens to dissapoint. Oh... wait..... did I say 40% haircut?
Blackrock "is comfortable with intermediate bonds". That can't possibly be true.
Love the title of this post. Well done, gents.
"what happens if the spreads do reflect fundamentals?"
Declare it a non-credit event and apply some Mark to Myth accounting. All will be fine.
http://www.youtube.com/watch?v=sFacWGBJ_cs
cant wait to see the blackrock bankruptcy filing to see how much they owe CNBC for pump fees
Mark to markets?!?!?!?!? Tyler..........when does that ever Happen?
Let those chips fall.....
Blackrock full of shit.
You didn't say 40%, I distinctly heard you say 60% my good man.
Mayday Mayday - BlackCock Down!
don't worry, maybe Dr. Bernanke will prescribe some Viagra for the unfortunate patient. :)
No kidding, they are going to really feel it. Over 7% and still climbing, they think that Italy will be bailed out but who will pony up the trillion or so to do it or calm the market?
Uh--anybody notice the reverse flash crash? Did this really happen?: http://finance.yahoo.com/q/ta?s=%5EDJI+Basic+Tech.+Analysis&t=1d
Translation:
2nd week October: There's no way in hell the 10 year tops 6%. We're a buyer.
3rd week October: There's no way in hell the 10 year tops 7%. We're doubling down.
LOL Blackrock.
Btw, speaking of Erik Schatzker, does anyone else tend to want to beat his face with an iron mallet everytime he appears on the air? He's like a mutant SuperDouche.
'Btw, speaking of Erik Schatzker, does anyone else tend to want to beat his face with an iron mallet everytime he appears on the air? He's like a mutant SuperDouche.'
You're not alone, friend.
in this case.. it is not bro's before hoe's LOL - http://hedge.ly/gFWVSm
Blackrock = the new Lehman. I sometimes get them confused with Blackstone. More scum.
Nice work Tyler! Keep up this sort of exposure to the MF Global customer assets theft.
For those who haven't noticed, the CME is stating that $80 million worth of COMEX REGISTERED gold and silver are unavailable for delivery due to the MF Global bankruptcy.
Did Corzine use $80 million worth of clients gold & silver warehouse receipts as collateral for a short term $400 Million loan?
The only way ANYONE at MF goes to prison over this is if the MSM reaches critical mass and the public becomes outraged. Zerohedge can push this story to critical mass. Don't let up!
Yup. Keep forcing those MSM bitches to print bro'.
"BLACKROCK'S ROVELLI: ITALY SPREADS DON'T REFLECT FUNDAMENTALS "
They still use fundamentals over there? Trouble.
OMG just STFU ROVELLI
BLACKROCK'S ROVELLI: ITALY SPREADS DON'T REFLECT FUNDAMENTALS
Wow. That is not going to end well...
Nope, that's going to leave a mark.
Tyler...I think you just opened up one big-ass can of worms.
this is gonna be fun.
/;-)
Blackrock respectfully asks the already compliant media (thank your for continuing cooperation, main stream media-government proxies of The Treasury & non-governmental but sometimes governmental Federal Reserve 'Bank'), and more likely, intelligent, inquisitive bloggers, backed with facts and data, to refrain from asking relevant questions pertaining to the compost heap of toxic assets it has accumulated en masse.
Thank you,
Blackrock
+1 Homerun TIS
HEY! Compost is useful! Italian bonds... not so much.
Obama and Al Waleed's US media.
Deeper. Let me shove my head deeper into the sand. Eventually I will see no evil, hear no evil, and you won't be able to hear me speak it either.
But your butt will be sticking up in the air. Hmmm.
Paging Banzai!
this would be great cartoon.
multiple ostrich heads (all the usual suspects Fed, IMF, ECB, etc.) poking out of the ground in china and one of them says, "hey guys, umm, do you think it's time to acknowledge reality?"
Can we have some numbers with that?
SHOW ME THE MONEY!!!
The power of ZH.
It is becoming greater and greater. Frightening and enlightening at the same time.
Peace.
"You shall know the truth, and the truth shall make you mad"
Aldus Huxley
Enlightening is the MO. Frightening? That's relative.
you kick ass tyler...awesome..
BlackRock - the Joe Paterno of Wall Street.
All that's happening is predictable, as there are 7 stages that every
major economy goes through. Those who know how it works profit & massive
wealth is transferred to them. Several months ago I learned this
information from a millionaire whose site I found & am sharing it with
everyone I know.
His free video
"How To Create Incredible Wealth in Today's Economic Crisis"
is at:
http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bid=290b868b&chan=y
Hope this info helps everyone as much as it has me.
Dr. Nancy
Please pedal your pablum somewhere else.
Clearly you have lost you way on this very confusing internet. Its a series of tubes, you know.
Thank you, Dr Nancy- you're a breath of stupidity in a sea of enlightenment;
You're why I remain short.
Actually, I think remaining short has something to do with growth hormones.
she found a millionaire. The dream of a professional whore.
MMmm, spam. delicious.
I will sign up just to protect all the money that the Nigerian Minerals Minister is going to deposit in my bank account.
pods
Dr Nancy
Suck the puss out of my golfball sized boil.
Boil? Did you say boil? Like this one:
http://www.youtube.com/watch?v=kfILrPvE27c
Dr. Nancy - did The "Elevation Group" remove you pen*s to change you from Nan to Nancy? Do you miss you p*e p*e?
can't stop laughing
No need to panic. Lehman Brothers is well capitalized and has little expose to CDO/housing.
You'll notice they are not denying the exposure, just saying the current situation isn't reflecting fundamentals.
It'll get better ... soon.
Anybody lookin' to buy a bridge????
ZH, you impress me with your analysis every day. thank you
And how the hell did you get a picture of my wife?
pods
You talkin' to me?
Het Blackrock, you are playing this the wrong way. You should say, "Yeah, were f-ed, and if we go down we will drag everyone else down with us unless there is a bailout!"
What's with the denial crap??
How dumb could black rock be and buy Italian debt. I'm not in the financial industry and I know that. Use some common sense.
My guess: Blackrock, like MF Global, was confident Tourette Timmay would succeed in his push for a massively leveraged EFSF toxic pile of dying piig shit.
Blackrock has become a Bagholder.
They are still using the old playbook that Buffet uses -
Buy the fear - when no one wants it and it seems to be on the edge - go all in!
That may have worked in the past many times - but it does not every time. I would agree that it really seems stupid to be long ANY of these bonds, even with CDS on them - they will not be honored anyway
They all thought they were buying those old Asian Tiger high yield bonds. Worked for Templeton and those 15% returns were great then, but hey, you gotta stop fighting the last war folks......Caught Corzine with his pants down.
That's nice response but what it says really?
So, Rieder is comfortable. Same guy who watched his own fund blow up while he was "comfortable" with Lehman exposure back in the day.
Nice
http://www.finalternatives.com/node/7652
Reider set up R3 in May after leaving Lehman, where he was head of its global principal strategies group. Lehman, like BlackRock, was an early backer of R3, owning a 45% stake in the firm, and the hedge fund bought about $5 billion in assets from the soon-to-be-bankrupt bank.
Lehman sold its stake in R3 in October, after filing for bankruptcy. R3 was also burned by the asset freeze stemming for the bankruptcy, leading to most of its roughly 30% in losses last year.
Pesky things like facts :D
Yep, nothing like instilling confidence (in what is a transparent ruse and farce to begin with) in Blackrock's obvious large, toxic exposure by putting ex-Lehmanite Rieder (who had something to do with Lehman's Risk [mis]Management at his old stomping grounds) out there to assure everyone that specifics need not be provided, but that the Blackrock boys are on top of the situation (after the risk accumulation has already occurred).
so I guess one should avoid using iShares ETFs (just in case)
that clears is all up, once and for all......NEXT!
Multi-trillion asset manager BlackRock responds...
Ain't that something? Well done you!
Clearly, a nerve has been hit.
Multi something. Could be personalities.
But yet - outstanding!
I Vote Z hedge as The New SEC, Because IT can watch great porn AND do its work, all at once.
Now go rattle Goldmans gilded cage, those fuckers are in deep doo doo with the Bunga Bunga as well
Nice respone. They are comfortable with Italian debt...even as the rest of the Street throws in the towel...or lies about its exposure.
As a reminder, it was none other than Larry Fink that said on the BlowHorn [CNBC] not two months ago, "Make them buy equities." Why? So Larry could sell them and use the proceeds to buy worthless Euro debt?
Reaching for yield, Larry? Good luck with that, you fuck.
OCCUPY BLACKROCK!
Nice work ZH: JEF, BLK, MS, DB, GS--they are all in the Italian death spiral together.
Just wait for the Spanish debt spiral to begin. Draghi will be printing overtime.
Just how much has the ECB lost so far, assuming they had to mark to market?
None wants the other to know their position.
"Yeah, sure, we are still in the water... water is fine... no problem... keep swimming!"
Even more likely is that they are all trapped in the pool and can't unload or adequately hedge without showing their cards.
Yes - you have it. Masters of the Universe forgot their system is a closed system.
Imagine a closed cage full with those feral pigs circling each other. trusting no one but having a burning hunger of greed to fill their rapacious appetites. They will eat each other
The JPMorgue - 6.6%. Don't forget them...lol.
Someone needs to push Blythe and Jamie into a wood chipper.
someone at the WH must read ZH
looks like the christmas tree tax is in question
http://abcnews.go.com/blogs/politics/2011/11/obama-administration-to-del...
stop reading abc news. you really will go blind and grow hair on your palms..........
Hey, Kito, I'm over here!
hey you should be smiling - DOG
i know i am with DXD and SPXU
im still in the red...im hoping tomorrow resolves that
EVERYONE at the WH reads ZH. They're scared to death of the truth. McCain's been reading ZH too apparently.
BLACKROCK CHIEF INVESTMENT OFFICER RIEDER COMMENTS IN A NOTE
"TURN THOSE PRINTING PRESSES BACK ON!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"
Watch the chain of debt holders implode. It's quite now. We should see signs soon.
"I'm very comfortable losing someone else's money, fuck you very much."
So, Blackrock, how much more Italian debt would you like to own and at what price?
didn't you read the response... they're stuffed to the gunnels with Itai debt ....gulp!
tyler ur a beast......larry fink has 2b asking "who the fk is tyler durden?"
Bring me the head of Tyler Durrrrrrdennnn.
keep hitting them on their nerves ZH!
Mongo only pawn....in game of life.
Knock em down one by one Tyler, the fuckers will all fall..because on a long enough timeline.........
because we all know blackrock is the greatest investor ever and NEVER make the wrong call...
http://www.finalternatives.com/node/6678
Is BlackRock based in China? This sounds like that article earlier describing the front door/back door analogy.
So, BlackRock, are you saving face??
Blackrock and blackstone are impenetrable and you can never get a picture of their structure. They are heavily involved with the ponzi that funds both government and corporations. Shit deep into quant and run all the computer tech and medicine.
That is FUCKING priceless - spreads on very liquid bonds don't reflect fundamentals!!!
What a fucking joke, they should be ashamed to release a statement like that.
And perhaps BLK can follow in Jefferies' footsteps and be so kind to break down it gross and net exposure for all to see?
Uh... unless JEF’s net exposure reduction is suspiciously coincident with a BLK net exposure increase and they'd just as soon not draw attention to it.
So, they're happy with losing money on that position. Interesting.
Right. When you LOSE money on Wall Street you can't be arrested .....
Fuck these Hedge Funds
FUCK YOU I WANT A GODDAMN FUTURE YOU PIECE OF SHIT ASSHOLES
Breath.....
Can we see our capital unlocked now so our Generation can get to work on building from the Ashes? Its already a done deal, just let it happen.
If you are letting some white shoe boy from Wall Street or, Washington for that matter, dictate your future then you've got a lot to learn. Want a future? Don't participate. Buy Gold and silver, become self reliant and fuck the rest of them.
well said Dr E
individualism ....is the key to understanding and unlocking this collective shit-bollocks
self sufficiency is the way to go ....collectives are toast
Go local, not alone.
Upon waking up from his 3 pm drool-fest nap, Barton Biggs, upon hearing of something 'bad' happening in Europe and Italy (soon to be Spain & France), realizes he has some sort of financial exposure to some type of sovereign instrument 'over there' in his 20mm AUM super fund, at which point he angrily mumbles Damn You, Zero Hedge!, before sharting in his Depends and eating some candied prunes and praying to The Bernank.
I suspect they are unloading their bonds while responding to the media..
Forever young! Goldman turns 99....yet again.
I've got a feeling we're about to do some serious spelunking into the close.
I am Jack's smirking sense of satisfaction:-)
Denied. :-(
I was really looking forward to some epic ugliness.
alas...the week is not over...
So basically BlackRock is saying we're quite happy with our Italian position and oh, by the way, can you remove those margin requirements for a while? I'm good for it, really....I'll bet ya a pizza!!!!!
Shorts can't get enough of SEF. EPV is making a big move today with a 12% return. I am Anti-Robo
How many banks, pension funds, hedge funds, etc... THOUGHT they had CDS as hedges.
My guess it was huge.
HERE'S TODAY'S REAL BIG STORY!!
I can't believe this - he's finally got it! (I think) He can't explain it - but at least he can see it's happening. This is one of the seven signs of CRASH!!!!
http://www.businessinsider.com/jim-cramer-reasons-why-markets-crazier-th...
Time to average down...again.
What is Italy the 4th largest bond market in the world,LMAO that the BEST blackrock can come up with is "doesn't reflect fundamentals". Last time i hear that it was 2 weeks ago and Dick Bove was saying is about MF Global.
did Bove really say that? wow. just wow.
What did you expect, they're paralyzed or completely immobile at least. 3.6T AUM doesn't unwind so fast...
They are used to making sure spreads don't reflect fundamentals - in their favor!
Well gold is hitting the shitter today go figure...
Indescriminate selling. It's short term overbought anyways. Selling shouldn't be too prolonged.
USD chart explains a lot of the gold price move.
If only they realized it was confetti also :)
It's actually up, it's that everyone is jumping into USD so it makes the exchange less favorable.
Bad day at Black Rock, baby!
http://www.youtube.com/watch?v=F1fhLMsK4ZU
When Cramer gets out and defends Blackrock it's the kiss of death. We should see the Italian debt exposure signs soon. Like vaporization after a nuke is detonated.
So how come Italy managed to plow through with the same debt load of 120 percent of GDP with 15 PERCENT interest rate on 10Y in 1992? It stayed about 10 until early 1996 and still no default. This is exactly how Americans lose money with shorting against Europe, either with eur-usd or bonds.
They think every Mediterranean country is just another Greece, without doing their homework. Just assumptions, no facts. Most of the debt is owned by domestic players in Italy, just like in Japan.
No, most of the debt is not owned by domestic players. 52% is owned by foreign investors.
oh yeah--and btw, debt doesn't matter UNTIL growth stops...got it?
Actually even with zero growth ( though Italy has actually done marginally better than that) what matters is that debt is halted . What matters is overall tax receipts have to be greater than expenditure and in Italy there is ample manouevring for that.
So I would tend to be on the unpopular side here, but Italy has quite some space to manouevre and needs to 'simply' show that its reforms are implemented precisely to achieve that target . They already are showing good signs with a primary surplus . Who else matches that ? the US ? hahahha . Am waiting for the show to kick off again when the debt ceiling is going to be raised once more , $15 trillion and counting ...
As private wealth in Italy is estimated to be a conservative 5 times current sovereign debt, the case for Italy is not the same as for Greece at all . Does private wealth in the US match Italy's ? Hahah. If the combined private and sovereign debt are taken into account who is in a better position ?
Growth is not the only parameter here, maybe you should get it ! Receipts vs Expenditure its that simple mate, not simply a matter of growth .Sack all those wasteful politicians, reduce state ownership , sack the unproductive public employee .Long Pizza anyday short KFC !!
Analyst on the bubble channel advised we are buying gold for all the wrong reasons. it is just the momo crowd buying and that it is wrong for us to buy gold now.
I just luv it. As long as I keep hearing shit like this I will add on every dip. Wonder how much this guy gets paid.
Where's my fucking money Lebowski?
Blackrock respects ZH and the Tylers. About damn time...
Well fucking done ZH
Tyler(s),
No hot tubs, no private planes for you/y'all.
Backdoor bailouts is where its at.
PPT is saving the day here
Re: "BLACKROCK'S ROVELLI: ITALY SPREADS DON'T REFLECT FUNDAMENTALS"
LOL
They are even more complacent/clueless at BlackRock than many of us initially suspected.
Timberrr! Short BLK! Short the clueless overvalued pig in denial down to zero!
Not so sure about that...
Blackrock ain't part and parcel of the problem like 200 West Street.
They may screw up on bets from time to time, and who doesn't, but they keep to themselves...
Blackrock = Jerry Sandusky
Pennsylvania is for lovers
Since when have fundamentals mattered?
BLACKROCK ENCOURAGED POLICY MAKERS ADDRESSING CHALLENGES
Translation: we are completely confident our bad trades will be made good by taxpayers money
They way ZH is taking them down, we only have 21 or so days left for the rest of the dealers to collapse under the weight of their ego.
I would be careful staying short here once this rumor wears off. Just saying guys, BlackRock WILL be fine. Hey TD, I think you get more bang for the buck if you stick with smaller outfits ala JEF though. Just one opinion. Impressive drop though, lol
Size doesn't matter. Take a look back.
i just laughed out lound in front of everyone whilst reading this
well done zero hedge. black rock the reality call from hell is ringing. you best answer that call. EU endgame is here. now you write down that toxic sh*t. you seen gold rallying prior to italy bond meltdown?
take the pain now.
Europe, in fact, has been on it's knees since WW2. The Euro was a farce to begin with: a scheme to enrich the banksters/oligarchy and farces end badly; just take a look around.