> Allocating capital takes a lot of work, and a lot of courage.
Less so when you've captured government and setting|opposing policy at Senate|POTUS level (in US, in a similar manner elsewhere) to worsen health insurance and housing access to your own benefit.
The Ruling Class S01E03 American Buyout did a tidy little episode on the downsides of The Blackstone Group.
This is hard so I built a stock analysis platform for myself. But there are much better ways to get a diversified basket of solid stocks than blindly sending your money to the same 500 companies everyone else is sending their money to.
There isn’t a simple formulaic answer to the question of how society should most optimally invest it’s excess capital.
Yes but optimally there would be at least some proliferation in index funds, and they would index differently.
There are 2 top funds that invest in the same 500 companies. Many in the US who earns well is sending x% of their income to these funds without forethought. It's far too much mindless capital concentration.
Even without the index funds, the S&P 500 is used as a base reference in many investment contexts.
When everyone blindly accepts a truth in investing, it's worth keeping an careful eye on it to make sure it stays true.
> Yes but optimally there would be at least some proliferation in index funds, and they would index differently.
Great, now investors have to choose between which index fund to pick. What makes you think the average investor is qualified to make that choice? By definition one of them will make above average returns, and the other below average returns, so half of investors will make below average returns and the other half will make above average returns. You can't have everyone making above average returns. Why not split the difference and invest in both of them (ie. buy the market), and get average returns without having to worry about which one to choose? That's basically what buying broad market index funds (eg. VTI or ITOT) does.
I'm not saying average investors are qualified to pick index funds or stocks. I'm saying they really ought to be.
Money is a form of power, and blindly applying it in a spot just because everyone else is doing the same strikes me as not optimal.
Our saving grace is probably that the S&P500 is extraordinarily well-chosen. It's diversified across place, industry, and to some extent size. And it helps that America is an economic machine for the ages.
> I'm not saying average investors are qualified to pick index funds or stocks. I'm saying they really ought to be.
In the sense they "ought" to vote, or they should do it because it would result in better returns for them personally? I don't think the former is a good reason, because I don't think the average investor is going to do a better job at allocating capital than wall st analysts. The latter has empirically been proven false. Actively managed funds have collectively underperformed passively managed funds, and daytrading retail investors almost always lose money.
>Money is a form of power, and blindly applying it in a spot just because everyone else is doing the same strikes me as not optimal.
People investing money in passive funds aren't messing with the price discovery process. Since they buy everything in proportion to market cap, they're not picking winners or losers. As long as some active participants exist, price discovery will still happen. If their numbers drop critically low, the market might be more be less accurate or be more susceptible to manipulation, but we're not anywhere near that point yet. In contrast, encouraging "average investors" to pick stocks absolutely does mess up the price discovery process. The average person is dumb and spends way too much time chasing whatever they heard on news yesterday night. A horde of retail investors likely reduces the overall "intelligence" of the market (through idiotic trades) and likely results in losses for them (from more sophisticated investors taking advantage of their behavior).
>Yes but optimally there would be at least some proliferation in index funds, and they would index differently.
Is there not? I rolled over a 401k a few weeks ago and had several indexes to choose from, each represented by multiple funds. The S&P 500 was included in some of those indexes. But there were plenty of options that did not touch the S&P at all.
> It's far too much mindless capital concentration.
Maybe it is. Maybe there is a systemic risk there. I have long thought this myself but cannot articulate the risk beyond "big money in small place". And I cannot rule out that there isn't a systemic risk and that the top 500 US companies are near-optimal allocators of capital. Therefore being the best place to send your money.
About the "mindless" bit. Index funds are mindless. That's their job. You put money in, it grows (or shrinks) with the market, all while keeping your guaranteed losses, aka management fees to an absolute minimum (I'm sure you know all this). Is that really a mindless choice? I do not to think so. I think of it like choosing Python over C when I just need to bang out a few calculations.
> When everyone blindly accepts a truth in investing, it's worth keeping an careful eye on it to make sure it stays true.
I think what you see as everyone accepting a blind truth is really a large number of people making rational individual decisions. If its truly mindless dogma everyone is following, and you are not, then congratulations - you are well positioned to "win" the investing game.
You make good points. I meant mindless as a bad thing on the part of the investors. Index funds indeed beat most investors by being mindless! (At least while everyone sends cheques their way every month).
> Allocating capital takes a lot of work, and a lot of courage.
I don't think it does. Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. Add some contacts to that (like private phone calls with the FED) and it's even easier. Having capital is a shortcut to making things happen. What's difficult and takes work is bootstrapping without capital.
> Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results.
It's easy when you're talking about someone's 401k with half a million dollars in it. With one click you can put it in the S&P 500, a 60/40 split, a target date fund, or if you're young and frisky maybe you put it in a mix of crypto, renewable energy companies with an uncertain future, and some pre-trial drug companies, because you can afford to lose it all.
If you're BlackRock with $9T AUM and you know that it's other people's retirement money you're managing, it's a lot harder. That much capital moves markets. You can't go in and out of positions easily, because the very act of you buying or selling alters the price appreciably; that is, you're too big of a player to be an invisible participant in the market.
Hell, even a high net worth individual looking to place $50mm isn't going to have an "easy" job, once you realize that the name of the game is actually preserving the purchasing power of that capital. That takes work. It doesn't come for free.
> What's difficult and takes work is bootstrapping without capital.
This is also true. But if managing capital was that easy, nobody rich would ever not be rich anymore. The Vanderbilt family was at one point estimated to be worth more than 1% of the US GDP; yet by the fourth generation, they sold their famous mansion, The Breakers.
That's why most people with a lot of capital hire others to manage it.
Also, there are many cases where capital is just "left to sit" and still grows. If you get lucky enough, even dead people can grow their capital.
Capitalism might help if you want the strongest loggers to cut the most logs. But it doesn't help the smartest scientists do more science. Science just doesn't work that way. That's why we are transitioning from picies (age of mass production) to aquarius (age of resource mangement). Why will our children have to carry their own water?
Well sure, because they're an investment company. They manage people's money. A lot of people seem to talk about BlackRock as if they're investing their own money, which would be similar to pretending your bank owns all the money that you put in it. They have $10Tn under management, but they have a market cap of $100bn. So the vast majority of what they're doing is just brokering deals for their investors. The fact that Blackrock did this deal doesn't tell you anything about who is exposed to the upside or downside.
Agreed. Investing with one of the huge investment firms such as BlackRock, Vanguard or State Street feels like investing in the erosion of democracy and the monopolization of the means of production.
The optimal strategy for them is to coerce all the companies that they invest in to only do business with each other in order to completely lock new competitors out of the market. This is very bad for consumers and society.
Vanguard literally provides for investment in every security. All of them. Every single one. I currently own interest in every equity security available to a US investor by purchasing a single ETF. How is it that Vanguard (which is owned by its funds which in turn are owned by individual investors in those funds) would benefit from coercing literally every publicly traded company from transacting with every other non-publicly business? For instance, of what benefit is it to Vanguard to prevent Sysco from selling food to restaurants that are not publicly traded? Should Apple not sell phones and laptops to any non-publicly traded business? Should Amazon stop transacting with non-publicly traded companies? How does any of that work in my interest as an owner of Vanguard?
The shenanigans are thought to be around M&A and alternatives. A company like Vanguard can use market power to juice its more profitable products by depressing prices.
$10 trillion AUM and a market cap of $100 billion means that 99% of their investments are directly on behalf of their clients, that's what GP is emphasizing.
Why does that matter? Why is 10T too much? It's a big number but that money is ultimately under the control of the individual asset holders (so far as I understand it anyways).
Agree on all points except the comparison with banks. The banks do technically own the money you put in it - and what you get in return is an IOU. So a bank is a very different sort of thing.
I think that's an overly semantic argument. I can be as certain as I am of anything that the number in my RBC chequing account corresponds exactly to the amount of money I can withdraw or spend, and if that ever stops being the case I'll likely have bigger concerns than money.
Might be an American thing, we only have FDIC insurance up to a certain limit and the the difference of what happens in a bankruptcy is mechanically very different between a broker and a bank. Historically this has also been different for the stakeholders too, which is why people were not certain the number would actually result in them being able to withdraw funds from Silicon Valley Bank. Though recently they’ve de-facto increased the FDIC insurance limit by making sure whatever bank bought the distressed bank would accept the liability for the deposits over that.
I think it is an American vs Canadian thing. The list of ten largest banks in North America is nearly evenly split between American and Canadian banks[0], so the five main Canadian banks are 10x as large as their American counterparts, proportional to the population.
The only conceivable scenario where a major Canadian bank fails and any depositors are not made whole is one where the government has lost the ability to maintain the currency and the Canadian dollar is worthless anyway.
But this matters in the context of parent comment because different things happen to money that you deposit in a bank compared money you have invested in, say, a mutual fund/ETF (which most of Blackrocks funds are) after they reinvest (even if both invest in the same loan!).
The mutual fund would use the cash to buy stocks or loans and you would be entitled to a share of that profit or loss (both upside and downside), but the mutual fund manager would typically only be paid an annual fee (1).
Money deposited in a bank gives you no upside, and, as you say, a tiny downside risk. (even before deposit insurance) Those taking the downside risk (as well as the upside) is mainly bank equity investors.
(1) As another commenter correctly pointed out there are also other sort of funds that look a bit more like banks for various reasons, but that also doesn't necessarily mean the fund manager is the one taking the upside/downside risk.
There are plenty of (particularly debt/bond) investment funds structured this way too ie you buy an IOU from them (for varying reasons from tax to regulation to legal costs) - "securitization vehicles", CLOs, etc.
<The fact that Blackrock did this deal doesn't tell you anything about who is exposed to the upside or downside
Can you explain this part more? Does blackrock not invest its own money in deals? And are specific deals specific to blackrock customers or do they just take a percent of their overall holdings and invest them in individual deals?
Most of the money "invested" in this deal belongs to institutions and individuals who have chosen to invest in BlackRock products. A trivial example is if your pension is with BlackRock, they are investing on your behalf and they get a very minor fee for it (minor in terms of percentage, not value). So while the headline is that BlackRock invested in ABC, the actual exposure to the profits or losses is for the people whose money they have invested. The amount of money BlackRock might invest of their own is usually negligible ( sometimes called coinvesting or balance sheet investing, not common for larger firms like fidelity or BlackRock).
What the exact flow is will depend ultimately on how the fund is structured. For example, Goldman will run a private equity focussed fund that you can put money in as a customer, so if you did put money in it, they would invest in similar deals on your behalf. Other customers of Goldman may or may not choose to invest in that fund, preferring something like a bond fund or equities fund etc.
Blackrock is an asset manager. You can go to ishares.com, search for an ETF, buy shares of it and Blackrock will have your money investing it on your behalf.
It will take away a small percentage of your money every year to pay costs and make its profits, but you will profit from the returns of the investment itself.
Blackrock even manages a large part of Jerome Powell's, the chair of the Federal Reserve, money. It appears to be a conflict of interest but maybe I don't understand the intricacies of the monetary system.
"The Fed Is Subsidizing the Money Market Funds Operated by Larry Fink’s BlackRock as BlackRock Manages a Big Part of Jerome Powell’s Wealth" [0]
Virtually every rich person in America might have some funds with BlackRock, whether directly or indirectly.
The site you linked is doing a favorite exercise of conspiracy therorists; A is related to B which is related to C which is related to D. Therefore, A and D have conspired, despite in reality not having anything to do with each other.
And you are assuming that the problem is a real conspiracy theory. There is no need to assume any conspiracy to understand that the system is crooked. Even if it is "normal" to have A linked to B then linked to C, with A benefiting C, there is a moral hazard in a system that makes this possible.
Powell and Blackrock have something to do with each other. It's reasonable to assume a conflict of interest.
"Fed Chair Powell Has Upwards of $11.6 Million Invested with BlackRock, the Firm that Will Manage a $750 Billion Corporate Bond Bailout Program for the Fed
" [0]
I think the contentious point is not that "Fed Chair Powell Has Upwards of $11.6 Million Invested with BlackRock", it's that concurrently "the Firm that Will Manage a $750 Billion Corporate Bond Bailout Program for the Fed". At most one of those two things should be true for there to be no conflict of interest.
The fed choosing an asset management firm is similar to choosing a vendor. That in itself isn't a "conflict of interest". That only arises if there's reason to believe that the Fed or its officials are making decisions that benefit themselves personally at the expense of the fed. For instance, if they hold outsized positions in blackrock and chose them despite not being the best choice (eg. vanguard is is cheaper).
The Chairman of The Fed has his assets being managed by a company that the Fed does business with. It's completely reasonable to assume a conflict of interest in this less-than-transparent environment.
The upper tiers of power don't deserve the benefit of the doubt.
I agree that it's a conflict of interest, but I'm not sure how the chair of the fed could keep their money without a conflict of interest somewhere, given that their role necessarily has interests in all US financial institutions.
For the chair to not have a conflict of interest, they'd need to forfeit all their money, or keep it in cash under their mattress.
I'm of the opinion that anyone in government or regulatory agencies should be forbidden from conducting any business at all while in office. Put it all into a blind trust.
It should be a crime to be a regulator while doing business with the entities one is regulating. As I said, just my opinion.
>I'm of the opinion that anyone in government or regulatory agencies should be forbidden from conducting any business at all while in office. Put it all into a blind trust.
Following the Dallas/Boston Fed scandals a couple of years ago, the Fed does enforce this separation of interests, and Powell's money is now held in a blind trust. The trust is managed by Blackrock.
There's not a single thing the Fed chairman could invest in that wouldn't be a conflict of interest -- whether the world's largest asset manager (blackrock), broadbased ETFs, or even USD since his monetary policy effects the dollar's purchasing power.
I was recently shopping for an UPS + couple 100Ah Batteries solution and failed to find an easy way to buy something not manufactured in China. Northvolt seems to not be present in retail at all. Are there any good places I should've checked out?
Most suppliers in this industry do b2b sales. Northvolt would be producing battery cells for use in automotive in large volumes. Volvo is one of their customers. I don't think they do retail sales in small quantities.
In general, it seems more common in China for companies to do business with each other via e.g. Alibaba. You can actually order non trivial amounts of raw materials via Alibaba. For example if you search for 1080 steel, you can actually order tons of steel from various suppliers.
We've banned this account for breaking the site guidelines and ignoring our requests to stop.
If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. They're here: https://news.ycombinator.com/newsguidelines.html.
As far as I can tell, essentially the entire "portable" battery (like car batteries in the 100Ah range) is essentially a sturdy plastic container around generic manufactured battery cells.
There are only a few companies that actually manufacture their cells in the USA.
China won almost total dominance of LFP batteries, apparently because Hydro-Quebec enforced steep patent royalties everywhere else. It's no coincidence that manufacturers are starting to look elsewhere now that the patents are expiring.
Generally have been satisfied with Anker, though that stuff is made in China the chargers and batteries have been good. Monoprice used to be good but I haven't used anything from them in a while
People parrot this, but do they? Or is it just the case that they are one of the largest ETF issuers in the world, and it is through those vehicles that they are “invested”?
Blackrock doesn't 'own' Tesla, or any company really. They hold and manage stocks for their customers. If you own an iShares ETF or mutual fund, you own the companies, not Blackrock.
I just don't think this is a practical argument. You have zero control, influence, or access to the businesses BlackRock controls. By contrast Larry Fink has the power, which he has regularly exploited, to reshape entire economies at the snap of his fingers, let alone just one of the many businesses under their control.
Which is exactly what investors pay Fink and the BlackRock team to do. Most people don't have time to analyze and choose things to invest in, so they offload that responsibility to BlackRock in exchange for some fees. The system is working as intended.
To me, the bigger issue is whether BlackRock just gets paid a fee to manage the portfolio composition, or whether they can also exercise voting rights on shares in their ETF.
I thought gigafactory had no meaning other than Tesla's marketing speak for a large factory, but apparently the term is gaining traction for better or worse:
> The term "gigafactory" has also been adopted by other companies which are involved in the manufacture of electric vehicles and other clean tech products. Established automobile manufacturers such as Jaguar and Volkswagen now use the term to refer to their own electric vehicle factories.[6][7] Newer companies such as Stellantis have also embraced the term[8] by referring to four new "gigafactories" in France which will produce lithium-ion batteries for electric vehicles. Other companies such as Holosolis[9] and 3Sun,[10] which only produce solar cells and finished solar panel assemblies, also use the term "gigafactory" to refer to their facilities. The term is therefore understood to generically refer to large industrial facilities which are associated with the decarbonization and electrification trend.
What’s the rate on the note? US treasuries are paying 5+%. Unless there’s some bonus exercise rights for the conversion, this must add some significant credit risk premium.
Good question but arguably they don't have to match 5%, they might put these notes in things like a low climate impact fund where conscious investors accept lower returns for the sake of the climate/environment.
I'm just thinking out loud though, I'm just an armchair investor, for all I know these notes are paying 10%, although I doubt it.
If you buy equity in a highly risky company, there's a very large chance that equity ends up worth nothing before you can sell it to someone else.
If you do a convertible note, you have liquidation preferences and will get most of your money back in the high probability event that the company fails.
It’s more complex than just that, there’s also tax implications for both investor and company. The liquidation preferences also apply in case of successful exit. If you have 2x preferences on this 1.2B note, if the company is acquired for less than 2.4B, the investor takes everything and the founder gets a gift basket, if the investor has a thoughtful secretary. If the investor has a board seat, they may even be able to force the sale over the founder’s objections.
Don’t ever give your investors board seats. They are not your friends or advisors.
If I understand correctly, a convertible note is much more favorable for the investor. If that is correct, is it safe to say Northvolt raised a convertible note instead of equity because their equity is not sufficiently attractive/valuable?
Are they comparable? The primary objective of a convertible note lies in securing a favorable share conversion, rather than primarily focusing on the interest rate (which can often approach 0%, leading to the emergence of SAFEs).
If the obligation involves repaying the note in cash along with interest, instead of settling it via shares plus a supplemental amount stemming from the interest, typically something has gone awry.
104 comments
[ 0.24 ms ] story [ 61.8 ms ] threadFeels like BlackRock have touched almost everything
'I produce nothing, I do nothing, I own'.
Having said that, Blackstone/rock has grown far too much. People need to stop sending their money to their index funds.
How?
Private equity takes active ownership in the companies they own, unlike BlackRock that invests and at most takes a few board seats.
There is no way to own something without being all over it.
Especially if you outsource the management of it, you now have to watch your money managers like a hawk and also accept a lower rate of return.
Less so when you've captured government and setting|opposing policy at Senate|POTUS level (in US, in a similar manner elsewhere) to worsen health insurance and housing access to your own benefit.
The Ruling Class S01E03 American Buyout did a tidy little episode on the downsides of The Blackstone Group.
https://www.mgmplus.com/series/the-ruling-class/watch/season...
I'm not anti-capitalist, but I am opposed to unregulated behemoths warping safeguards by the weight of their own capital and lobbying.
Where else do you send it to? Vanguard, with 7.7T AUM? For reference, Blackrock's AUM is 9.4T.
This is hard so I built a stock analysis platform for myself. But there are much better ways to get a diversified basket of solid stocks than blindly sending your money to the same 500 companies everyone else is sending their money to.
There isn’t a simple formulaic answer to the question of how society should most optimally invest it’s excess capital.
So then investing in an index fund should be a fine choice for some, even many, correct?
There are 2 top funds that invest in the same 500 companies. Many in the US who earns well is sending x% of their income to these funds without forethought. It's far too much mindless capital concentration.
Even without the index funds, the S&P 500 is used as a base reference in many investment contexts.
When everyone blindly accepts a truth in investing, it's worth keeping an careful eye on it to make sure it stays true.
Great, now investors have to choose between which index fund to pick. What makes you think the average investor is qualified to make that choice? By definition one of them will make above average returns, and the other below average returns, so half of investors will make below average returns and the other half will make above average returns. You can't have everyone making above average returns. Why not split the difference and invest in both of them (ie. buy the market), and get average returns without having to worry about which one to choose? That's basically what buying broad market index funds (eg. VTI or ITOT) does.
Money is a form of power, and blindly applying it in a spot just because everyone else is doing the same strikes me as not optimal.
Our saving grace is probably that the S&P500 is extraordinarily well-chosen. It's diversified across place, industry, and to some extent size. And it helps that America is an economic machine for the ages.
In the sense they "ought" to vote, or they should do it because it would result in better returns for them personally? I don't think the former is a good reason, because I don't think the average investor is going to do a better job at allocating capital than wall st analysts. The latter has empirically been proven false. Actively managed funds have collectively underperformed passively managed funds, and daytrading retail investors almost always lose money.
>Money is a form of power, and blindly applying it in a spot just because everyone else is doing the same strikes me as not optimal.
People investing money in passive funds aren't messing with the price discovery process. Since they buy everything in proportion to market cap, they're not picking winners or losers. As long as some active participants exist, price discovery will still happen. If their numbers drop critically low, the market might be more be less accurate or be more susceptible to manipulation, but we're not anywhere near that point yet. In contrast, encouraging "average investors" to pick stocks absolutely does mess up the price discovery process. The average person is dumb and spends way too much time chasing whatever they heard on news yesterday night. A horde of retail investors likely reduces the overall "intelligence" of the market (through idiotic trades) and likely results in losses for them (from more sophisticated investors taking advantage of their behavior).
> It's far too much mindless capital concentration.
Maybe it is. Maybe there is a systemic risk there. I have long thought this myself but cannot articulate the risk beyond "big money in small place". And I cannot rule out that there isn't a systemic risk and that the top 500 US companies are near-optimal allocators of capital. Therefore being the best place to send your money.
About the "mindless" bit. Index funds are mindless. That's their job. You put money in, it grows (or shrinks) with the market, all while keeping your guaranteed losses, aka management fees to an absolute minimum (I'm sure you know all this). Is that really a mindless choice? I do not to think so. I think of it like choosing Python over C when I just need to bang out a few calculations.
> When everyone blindly accepts a truth in investing, it's worth keeping an careful eye on it to make sure it stays true. I think what you see as everyone accepting a blind truth is really a large number of people making rational individual decisions. If its truly mindless dogma everyone is following, and you are not, then congratulations - you are well positioned to "win" the investing game.
I don't think it does. Sitting on this kind of capital is easy, sprinkle it in enough places during good times and you'll get good results. Add some contacts to that (like private phone calls with the FED) and it's even easier. Having capital is a shortcut to making things happen. What's difficult and takes work is bootstrapping without capital.
It's easy when you're talking about someone's 401k with half a million dollars in it. With one click you can put it in the S&P 500, a 60/40 split, a target date fund, or if you're young and frisky maybe you put it in a mix of crypto, renewable energy companies with an uncertain future, and some pre-trial drug companies, because you can afford to lose it all.
If you're BlackRock with $9T AUM and you know that it's other people's retirement money you're managing, it's a lot harder. That much capital moves markets. You can't go in and out of positions easily, because the very act of you buying or selling alters the price appreciably; that is, you're too big of a player to be an invisible participant in the market.
Hell, even a high net worth individual looking to place $50mm isn't going to have an "easy" job, once you realize that the name of the game is actually preserving the purchasing power of that capital. That takes work. It doesn't come for free.
> What's difficult and takes work is bootstrapping without capital.
This is also true. But if managing capital was that easy, nobody rich would ever not be rich anymore. The Vanderbilt family was at one point estimated to be worth more than 1% of the US GDP; yet by the fourth generation, they sold their famous mansion, The Breakers.
That's why most people with a lot of capital hire others to manage it.
Also, there are many cases where capital is just "left to sit" and still grows. If you get lucky enough, even dead people can grow their capital.
Capitalism might help if you want the strongest loggers to cut the most logs. But it doesn't help the smartest scientists do more science. Science just doesn't work that way. That's why we are transitioning from picies (age of mass production) to aquarius (age of resource mangement). Why will our children have to carry their own water?
The optimal strategy for them is to coerce all the companies that they invest in to only do business with each other in order to completely lock new competitors out of the market. This is very bad for consumers and society.
Please elaborate. What's the right amount?
Why does that matter? Why is 10T too much? It's a big number but that money is ultimately under the control of the individual asset holders (so far as I understand it anyways).
The only conceivable scenario where a major Canadian bank fails and any depositors are not made whole is one where the government has lost the ability to maintain the currency and the Canadian dollar is worthless anyway.
[0] https://en.wikipedia.org/wiki/List_of_largest_banks_in_North...
The mutual fund would use the cash to buy stocks or loans and you would be entitled to a share of that profit or loss (both upside and downside), but the mutual fund manager would typically only be paid an annual fee (1).
Money deposited in a bank gives you no upside, and, as you say, a tiny downside risk. (even before deposit insurance) Those taking the downside risk (as well as the upside) is mainly bank equity investors.
(1) As another commenter correctly pointed out there are also other sort of funds that look a bit more like banks for various reasons, but that also doesn't necessarily mean the fund manager is the one taking the upside/downside risk.
Can you explain this part more? Does blackrock not invest its own money in deals? And are specific deals specific to blackrock customers or do they just take a percent of their overall holdings and invest them in individual deals?
What the exact flow is will depend ultimately on how the fund is structured. For example, Goldman will run a private equity focussed fund that you can put money in as a customer, so if you did put money in it, they would invest in similar deals on your behalf. Other customers of Goldman may or may not choose to invest in that fund, preferring something like a bond fund or equities fund etc.
It will take away a small percentage of your money every year to pay costs and make its profits, but you will profit from the returns of the investment itself.
1- https://www.pionline.com/money-management/blackrocks-aum-cli...
"The Fed Is Subsidizing the Money Market Funds Operated by Larry Fink’s BlackRock as BlackRock Manages a Big Part of Jerome Powell’s Wealth" [0]
[0] https://wallstreetonparade.com/2021/10/the-fed-is-subsidizin...
The site you linked is doing a favorite exercise of conspiracy therorists; A is related to B which is related to C which is related to D. Therefore, A and D have conspired, despite in reality not having anything to do with each other.
"Fed Chair Powell Has Upwards of $11.6 Million Invested with BlackRock, the Firm that Will Manage a $750 Billion Corporate Bond Bailout Program for the Fed " [0]
[0] https://wallstreetonparade.com/2020/05/fed-chair-powell-has-...
The fed choosing an asset management firm is similar to choosing a vendor. That in itself isn't a "conflict of interest". That only arises if there's reason to believe that the Fed or its officials are making decisions that benefit themselves personally at the expense of the fed. For instance, if they hold outsized positions in blackrock and chose them despite not being the best choice (eg. vanguard is is cheaper).
The upper tiers of power don't deserve the benefit of the doubt.
For the chair to not have a conflict of interest, they'd need to forfeit all their money, or keep it in cash under their mattress.
It should be a crime to be a regulator while doing business with the entities one is regulating. As I said, just my opinion.
Following the Dallas/Boston Fed scandals a couple of years ago, the Fed does enforce this separation of interests, and Powell's money is now held in a blind trust. The trust is managed by Blackrock.
Even that would be a conflict! They are Federal Reserve Notes under that mattress, after all.
Kind of wild that one man* has the ability to change the dollar's purchasing power, which affects literally billions of people, isn't it?
*: Actually twelve members of the Federal Open Market Committee.
But they are often assembled in USA from foreign components, so you have to dig further into what cells they’re using.
https://northvolt.com/products/
scroll down to footer PRODUCTS heading for more vague marketing splurge.
In general, it seems more common in China for companies to do business with each other via e.g. Alibaba. You can actually order non trivial amounts of raw materials via Alibaba. For example if you search for 1080 steel, you can actually order tons of steel from various suppliers.
If you don't want to be banned, you're welcome to email hn@ycombinator.com and give us reason to believe that you'll follow the rules in the future. They're here: https://news.ycombinator.com/newsguidelines.html.
There are only a few companies that actually manufacture their cells in the USA.
But not really consumer products either.
The only retail product we offer at the moment is:
https://northvolt.com/products/systems/voltpacks/mobile/
and I am not even sure you can just outright buy it or only lease it
You can't just ship by mail such big cells due to fire hazards so I don't expect you will be able to just buy one
https://youtu.be/FMssS18nt-w
https://www.blackrock.com/corporate/about-us/investment-stew...
Are there kilofactories and megafactories? The rarely seen obscure myriafactories?
I thought gigafactory had no meaning other than Tesla's marketing speak for a large factory, but apparently the term is gaining traction for better or worse:
> The term "gigafactory" has also been adopted by other companies which are involved in the manufacture of electric vehicles and other clean tech products. Established automobile manufacturers such as Jaguar and Volkswagen now use the term to refer to their own electric vehicle factories.[6][7] Newer companies such as Stellantis have also embraced the term[8] by referring to four new "gigafactories" in France which will produce lithium-ion batteries for electric vehicles. Other companies such as Holosolis[9] and 3Sun,[10] which only produce solar cells and finished solar panel assemblies, also use the term "gigafactory" to refer to their facilities. The term is therefore understood to generically refer to large industrial facilities which are associated with the decarbonization and electrification trend.
https://en.wikipedia.org/wiki/Gigafactory
Not sure about trademarks though.
I'm just thinking out loud though, I'm just an armchair investor, for all I know these notes are paying 10%, although I doubt it.
Is the idea that if you're profitable before the note expires then you have the ability to buy the note back without losing equity?
If you do a convertible note, you have liquidation preferences and will get most of your money back in the high probability event that the company fails.
Don’t ever give your investors board seats. They are not your friends or advisors.
If the obligation involves repaying the note in cash along with interest, instead of settling it via shares plus a supplemental amount stemming from the interest, typically something has gone awry.