President Elect Ponzi

Whatever the political hue, the asset managers are pulling the strings

It’s no accident that the various candidates vying to be President Elect Trump’s Treasury Secretary should be drawn from the same pool of asset management firms. To all intents and purposes asset management firms now own America, and quite a bit of the world. BlackRock alone now has over $11trillion in assets under management. Larry Fink, the company’s CEO, has made clear that he needs to acquire more. 

As US national debt has grown markedly since the last Trump administration, so too have asset holdings of the big private equity firms and asset managers. Clearly it’s no coincidence.

BlackRock’s Big Asset Pile

The extent of growth of assets under ownership by Fink and his buddies comes down to a policy that was kicked off after the ‘great’ financial crash of 2008. Largely as a result of Fink’s close relationship with President Obama’s Treasury Secretary, Tim Geithner,  BlackRock was the chosen one as far as ‘economic recovery’ was concerned. And the net result of this partnership between Fink and the government was an explosion in employment for former FED executives in BlackRock, and a vast increase in the firm's assets under management. 

It’s suggested that it was Fink’s idea that the FED should ‘go direct’ - investing directly into the corporate bond market. Handily BlackRock and other asset managers now offer ‘approved’ ETFs (exchange tradable funds) that the FED can merrily buy. As of 2020 BlackRock was running debt buying programs focused on mortgage backed securities, commercial real estate, corporate bonds and treasury bonds. 

This activity is spun as critical for revitalising the US economy. However, it depends, of course, on the Treasury creating money out of thin air: hence the term ‘debt buying’. The Treasury and FED combo are essentially buying up $Trillions of assets with newly printed money. 

You’ll recall that one of Keir Starmer’s earliest visitors to Downing Street after his ‘landslide’ election was Fink (with Bill Gates in tow). Fink and the other Asset Management firms simply can’t acquire assets fast enough - they’re literally running out of stuff to buy. Hence they need to extend into new markets (e.g. buying up farmland in the UK or local government pension schemes). And Fink has also stated his ambition to acquire competitors with better positions in ‘alternative’ assets such as cryptocurrencies, commodities and futures. London is a lucrative market for these. 

Hence the new Trump administration’s intent to keep the momentum going for the money-printing-and-buying Ponzi scheme started under Obama, continued under Trump and Biden, and now with bells-on under Trump 2.0. 

So, for example, Howard Lutnick was, for a while, in the running for Treasury Secretary - although he’s now been given the Commerce role - responsible for hiking up America’s external tariffs, apparently. Lutnick is CEO of Cantor Fitzgerald - one of those alternative asset managers. He was also the guy who, in 2015, threw a fund-raiser bash at his home for Hilary Clinton - the only problem being that he was next-door-neighbour to none other than Jeffrey Epstein. Awkward.  

Although this incident is a wonderful exemplar as to the extent of asset managers’ loyalty to this particular get-rich-quick scheme of stealing money from public coffers. Whatever brand of politician occupies the White House you can be pretty sure the fund managers will give their loyalty provided the perpetual motion machine of money printing and funding keeps cranking. 

The latest ‘favourite’ for the Treasury job is one of the co-founders of one of the firms very definitely in Larry Fink’s target list for acquisition. Apollo Global Management only has a tiddly $600 billion under management but they operate in the super-lucrative ‘alternative’ market focusing on hedge funds, dodgy loan books, and mezzanine capital (expensive funding for companies that are deemed, often, to be distressed).  Apollo’s co-founder, Marc Rowan, is meeting Trump’s team today (apparently) to be interviewed for the Treasury Secretary role. And so the revolving door trundles. 

Meanwhile Elon Musk is tweeting that the US national debt is just simply terrible. But, be assured, the reason for the debt has relatively little to do with the cost of the government itself. Employment has gone up a bit - but the major costs driving the deficit and debt pile relate to pouring money into contractors owned by asset management firms - as well as debt held by companies owned by asset management firms and asset-management-firm-owned healthcare companies paid by state-funded medicare. 

Democracy is dead in America. Corporatism now pervades all the corridors of government. A new form of secularism - where asset managers and state are separated - is desperately needed. But that will only happen when the house of cards collapses. That may be sooner than you might think.

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