"the Big Three do exert the voting rights attached to these shares. Therefore, they have to be perceived as de facto owners by corporate executives. These companies have, in fact, publicly declared that they seek to exert influence. William McNabb, chairman and CEO of Vanguard, said in 2015 that, 'In the past, some have mistakenly assumed that our predominantly passive management style suggests a passive attitude with respect to corporate governance. Nothing could be further from the truth.' When we analysed the voting behaviour of the Big Three, we found that they coordinate it through centralised corporate governance departments. Hence, just three companies wield an enormous potential power over corporate America." (source, also this). In effect Vanguard and Blackrock forgo taking large fees in exchange for having enormous ability to exert power over the economy through influence on corporate boards and leadership. This power that is subject to little public awareness or accountability. This page gives a quick visual overview of it.
Larry Fink: "The behavior is going to have to change… this is something we’re asking companies. You have to force behavior. At BlackRock, we are forcing behaviors.”
In a recently published paper, our CORPNET research project comprehensively mapped the ownership of the Big Three. We found that the Big Three, taken together, have become the largest shareholder in 40% of all publicly listed firms in the United States.
All of our retirement accounts are investing in the stock market. That is why it's untouchable. Where else would our retirement accounts put their money?
Crypto may be opening up new avenues for leveraging. So this may be like the pre 1929 & 1930s stock crashes which were partly fueled by excessive leverage and the impact of tariffs for the second crash.
I wonder if this isn't just a matter of inflation being under reported because it's an easy metric to game while revenue and profits from companies are not.
In the US the official inflation figure between 2019 and 2025 was 28%, but I feel like most people "on the ground" are seeing a much higher inflation rate in housing, food and transportation.
So the stock market is effectively a somewhat doped inflation indicator because SP500 outperforms in general.
My anecdotal finding is good is closer to 40-60 percent more than in 2019. Perhaps the food staples haven’t gone up quite as much but everything else has.
Personal theory: the rise of ETFs as a fallback means that money isn’t leaving the stock market anymore. Instead of people selling off and going to cash, they go to SPY, which doesn’t have the downward pressure on the stock market that going to cash does.
I think it’s a result of the concentration of wealth.
Lots of wealthy people invest their capital and live off 2-3%, while the portfolio is expected to average 7-11%. They choose this distribution strategy because they are trying to avoid a worst case scenario where they run out of money. The median return from this strategy is that their portfolio grows substantially. This growth of their portfolios is causing a concentration of wealth in the hands of the rich.
Now anywhere that is a good place to park money is shooting up in value. This includes stocks, real estate, gold and crypto.
My model predicts that everything investible will go up in value much faster than inflation.
The passive investment argument doesn’t explain why crypto and real estate are increasing in value. Most passive investors are holding stock and bond indexes.
Neither model can explain why bonds have crashed in value. Both models predict that bonds should be rocketing up like everything else.
I've definitely considered liquidity & wealth inequality as reasons behind the resilience & height of the stock market, but I would never have considered the effort of a switch from active to passive brokers.
I guess short-term it means that the stock market just barrels upwards and shrugs off issues that would have resulted in market corrections.
Long-term, my guess is that the first effect of this will be on politics. The stock market is used as an indicator by politicians of consumer confidence and the more resilient the stock market is, the more willing politicians will be to play fast & loose.
What if we just banned passive investing? Surely it's bad for the economy to funnel all the money toward the biggest firms rather than the most competitive. If they're performing badly then their stock should crash.
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[ 3.1 ms ] story [ 43.1 ms ] thread"the Big Three do exert the voting rights attached to these shares. Therefore, they have to be perceived as de facto owners by corporate executives. These companies have, in fact, publicly declared that they seek to exert influence. William McNabb, chairman and CEO of Vanguard, said in 2015 that, 'In the past, some have mistakenly assumed that our predominantly passive management style suggests a passive attitude with respect to corporate governance. Nothing could be further from the truth.' When we analysed the voting behaviour of the Big Three, we found that they coordinate it through centralised corporate governance departments. Hence, just three companies wield an enormous potential power over corporate America." (source, also this). In effect Vanguard and Blackrock forgo taking large fees in exchange for having enormous ability to exert power over the economy through influence on corporate boards and leadership. This power that is subject to little public awareness or accountability. This page gives a quick visual overview of it.
https://archive.ph/bFE8h
Larry Fink: "The behavior is going to have to change… this is something we’re asking companies. You have to force behavior. At BlackRock, we are forcing behaviors.”
https://theconversation.com/these-three-firms-own-corporate-...
In a recently published paper, our CORPNET research project comprehensively mapped the ownership of the Big Three. We found that the Big Three, taken together, have become the largest shareholder in 40% of all publicly listed firms in the United States.
In the US the official inflation figure between 2019 and 2025 was 28%, but I feel like most people "on the ground" are seeing a much higher inflation rate in housing, food and transportation.
So the stock market is effectively a somewhat doped inflation indicator because SP500 outperforms in general.
I love this ending. Too many in the media are certain when no certainty is warranted.
Lots of wealthy people invest their capital and live off 2-3%, while the portfolio is expected to average 7-11%. They choose this distribution strategy because they are trying to avoid a worst case scenario where they run out of money. The median return from this strategy is that their portfolio grows substantially. This growth of their portfolios is causing a concentration of wealth in the hands of the rich.
Now anywhere that is a good place to park money is shooting up in value. This includes stocks, real estate, gold and crypto.
My model predicts that everything investible will go up in value much faster than inflation.
The passive investment argument doesn’t explain why crypto and real estate are increasing in value. Most passive investors are holding stock and bond indexes.
Neither model can explain why bonds have crashed in value. Both models predict that bonds should be rocketing up like everything else.
I've definitely considered liquidity & wealth inequality as reasons behind the resilience & height of the stock market, but I would never have considered the effort of a switch from active to passive brokers.
I guess short-term it means that the stock market just barrels upwards and shrugs off issues that would have resulted in market corrections.
Long-term, my guess is that the first effect of this will be on politics. The stock market is used as an indicator by politicians of consumer confidence and the more resilient the stock market is, the more willing politicians will be to play fast & loose.