rigorousintuition.ca

Lets start with BlackRock, the largest institutional investor in the world.
When you walk up to the door, BlackRock looks like this:



It’s a big, bad ass company, and Larry Fink is the all powerful deity in control of assets worth almost half of America’s GDP. But does Larry own BlackRock? When you look into the actual ownership, the voting rights, equity, etc. it looks like this (from wallstreetzen):



It looks to me like Merrill Lynch owns BlackRock for the most part. BlackRock only owns 6.5% of BlackRock. Hell, even Vanguard owns more.
But this is an illusion as Merrill Lynch is a wholly owned subsidiary of Bank of America. So BofA is the real owner of this megamachine. Well, not really, because Bank of America doesn’t own Bank of America. When I add the actual ownership of Merrill Lynch (BofA) into the Treemap it looks like this:



We see BlackRock actually owns more BlackRock than we thought through ownership of Merrill Lynch. Quite a bit of BR is owned by Berkshire Hathaway. I delved into Berkshire a bit and there are interesting things to say about it, but I won’t discuss it in this report. This apparent ownership is still illusory, since all of the companies other than Merrill Lynch/BofA are also owned by other companies. If I fill out the rest of the Treemap with their ownership it looks like this:



So here at last is BlackRocks ownership. Except of course its not because each of these companies are also owned by others. If I fill in all of these companies with their ownership it looks like this:



As you keep filling in the ownership further and further eventually it gets below the resolution of the screen, or your eye, or the wavelength of light.

Using this same process for BlackRock it looks something like this:



Welcome to BlackRock. The name is certainly fitting. In this Treemap the white represents Retail investors, the gray represents non-institutional insider investment (the actual people we think of as "owners") and the black represents the Big Bad megamachine: Megacorp.

Joe Hillshoist » Tue Jan 11, 2022 1:07 am wrote:The price of oil tripled in 1973, was stable for a while then doubled again during 1979. Wouldn't have more to do with inflation than anything else that decade?

Joe Hillshoist » Tue Jan 11, 2022 8:54 am wrote:So essentially the price of oil stayed the same in terms of gold but changed in terms of the most used currency?

Or tried to.

On August 15, 1971, the United States unilater- ally and without consulting allies or the IMF closed the “gold window.”6 With this “floating” of gold, the world moved from a fixed to a flexible exchange-rate sys- tem as countries followed West Germany’s lead and stopped interventions in the foreign-exchange markets once the United States stopped buying dollars with gold (James 1996, 220).
Gold was initially revalued to $38 per ounce, then to $42, and shortly thereafter it was allowed to float freely. By mid-1973, the dollar price of gold had risen to $90.50 per ounce, and by the end of the decade it had risen to more than $455—an increase of 1,200 percent in less than a decade.
As the world adjusted to a new international trading arrangement, currency mar- kets experienced turmoil. From early 1971 to mid-1973, the U.S. dollar fell dramati- cally relative to all Western currencies except the pound sterling. It fell more than 30 percent against the Deutschmark and the Swiss franc, and more than 20 percent against the currencies of Japan, France, Belgium, Holland, and Sweden. On average, by mid-1973 the U.S. dollar had fallen by 25 percent relative to the major Western currencies. Given that oil contracts were stipulated in U.S. dollars, this decline meant that oil revenues per unit from these countries fell to OPEC.

. . .

In 1970, slightly more than 10 barrels of oil would purchase an ounce of gold.8 By the next year, when the Bretton Woods agreement ended, with gold priced at $42 and oil fixed in terms of U.S. dollars at $3.56, oil sellers needed nearly 12 barrels of oil to buy an ounce of gold. This “real” oil price decline, and general worldwide infla- tion did not go unnoticed in the oil-producing countries. In 1971, OPEC built in a 2.5 percent annual inflation factor by which to adjust the nominal (U.S. dollar) price of oil.

Yet, by mid-1973, nearly 34 barrels of oil were required to buy an ounce of gold. In little more than two years, the gold price of oil had fallen by more than 70 percent, and the oil price of gold had risen by almost 200 percent.

. . .

On January 1, 1974, OPEC raised the U.S. dollar price of oil from $4.31 to $10.11, producing the first dramatic price shock. After this increase, the “gold price” of oil (at 12.8 barrels per ounce of gold) was back within its historical range. For the rest of the decade, including the second dramatic price rise in 1979, the gold price of oil stayed within its historical range. At the end of the decade, 14 barrels of oil exchanged for an ounce of gold, well within its historical range but with a “real” price approximately 25 percent lower than at the beginning of the decade.