BlackRock’s Warning: Get Your Money Out Of All Mutual Funds

BlackRock Inc. is seeking government clearance to set up an internal program in which mutual funds that get hit with client redemptions could temporarily borrow money from sister funds that are flush with cash.  – Bloomberg News

We may have been early on warning about leaving your savings in the financial system. It’s okay to be too early getting your money out of the system but it’s fatal to be just one second too late.  The gates are already in place in money market funds just waiting for the signal to be lowered

BlackRock’s filing with the SEC to enable “have cash” funds to lend to “heavy redemption” funds should send shivers down the spine of anyone with funds invested in any BlackRock fund.  In fact, it should horrify anyone invested in any mutual fund.

Larry Fink, BlackRock’s chief executive officer, said in December that U.S. bond funds face increased volatility, adding that he expected a “dysfunctional market” lasting days or even weeks within the next two years.   – Bloomberg

I warned last summer when the money market funds received authorization to put redemption gates in place that it was time to remove your money from these instruments.  The only reason a gate would be needed is if the people running the funds believed that there were risk events coming that would necessitate the gates.

BlackRock has already arranged credit lines from banks to cover the possibility of a redemption stampede from its riskier funds.  It’s clear the elitists running BlackRock now foresee events coming that will trigger a redemption run because the fund company is seeking SEC approval for the ability to take cash from funds with cash and lend that cash to funds that will need cash when the redemption rush begins.

Rather than let the market decide the value of the investments in BlackRock’s riskier funds, Larry Fink is going add even more leverage to the equation by enabling riskier funds to take on debt in order to avoid having to sell positions into a market that won’t be able to handle the selling.   This adds yet another layer of fraudulent intervention to a system that is ready to blow up from what’s already been done to it.

And let’s not forget, as I pointed out last summer, that BlackRock funds are already riddled with OTC derivatives, which is why Vice Chairman Barbara Novick has been running around Capitol Hill working to get a bailout mechanism in place for the Depository Trust Company’s derivatives clearing unit.

BlackRock Changes The Rules Of The Game Because Of An Outcome It Fears

This move will, in effect, transfer a portion of the risk of BlackRock’s riskier mutual funds – derivative-laced high yield and equity funds – to its more “conservative” funds, like high grade, short duration fixed income funds.

BlackRock

Anyone who invested in less-risky funds did so with an understanding of the definition and risk parameters of the funds at the time of investment.  But now BlackRock is changing the rules and risk parameters of those funds by exposing them to the counterparty risk of the riskier funds in the BlackRock fund complex which will be able to borrow money from the less risky funds.

This means that the Treasury fund in which your IRA or 401k is invested will now be “invested” in any fund that borrows money from the fund with your money.  The risk profile of your “conservative” fund assumes the risk profile of the riskier fund. Because of this, there is absolutely no reason for anyone to leave any of their money in any of BlackRock’s funds.

The SEC should deny BlackRock’s filing.  But it won’t because Wall Street is the SEC.

This move by BlackRock also signals that the elitists at BlackRock foresee an event that will disrupt the markets and trigger “bank” run on mutual funds.  What or when is anyone’s best guess.  But the fact that Larry Fink has decided to implement internal lending among funds indicates that he and his band of merry criminals believe an event will happen sooner rather than later.

To me, this is the signal that everyone should call up their mutual fund company, financial adviser or 401k administrator and get all of their the money out of any mutual fund.  Larry Fink has done everyone invested in any mutual fund a favor:  he’s unwittingly signaled that it’s time to get out – now.   Anyone who is aware of this and does not take action immediately is either a complete idiot or simply does not care about having their money taken from them by the criminal elite.

21 thoughts on “BlackRock’s Warning: Get Your Money Out Of All Mutual Funds

  1. Very, very valuable reporting Dave… these are the signals that are hard for those of us with less trained eyes and ears to pick up on… but you see it all so clearly. Thank you for taking the time to bring this news to those of us who are awake. All the Best, Jim H, aka 1 Kg Lunar Dragon.

  2. Hey Dave solid stuff as always. Saw El Finkster on Charlie Rose a few months back watched as I went to bed and felt like I needed to get up and shower. He was a total douche and went on and on about how everything was under control. That the economy was doing great and he expected the good times to get even better. My wife got pissed at me yelling at the TV.

    My PepsiCo Deferred Comp plan is nothing but Black Rock funds and PepsiCo Commercial Paper (deemed the safest) and another bond fund. I moved it all to the Commercial paper fund and have been stuck with a 2% interest rate. In Jan of 2017 and 2018 I get it paid out wonder what the heck the USD will be worth then. I set these up in 1995. Have to live with it but its not easy. The SOB’s will not give me my money until then under any circumstances. Thought I was being smart setting them to payout when I was 60 and 61 and hopefully retired….. So much for being smart…

    1. Fink is the mutual fund investment company version of Hillary Clinton. She probably puts on a strap-on and they take amyl nitrate and give each other reach-arounds while they watch child porn

  3. Beginning Of The Ending Sequence

    Another area where Fed buying looks to be very important is in our credit markets. Unless they step up with some serious buying, and soon, our 10 year Treasury yield will take out 2.5% to the upside. U.S. Treasuries and their “value” are what act as collateral or foundation for everything the world “believes in”. Before going further, I do want to mention another aspect of the ultra low rates we live with. When rates are 10%, a 100 basis point move is only 10%, when rates are 2%, a 100 basis move is 50%! In other words, movements in interest rates when rates are low have a hugely magnified impact. When rates rise, collateral “shrinks” very rapidly from a low interest rate base which means margin calls are more rapid and bigger in amounts. Higher rates will make insolvencies that much more likely and will then occur “systemically”.

    This topic was suggested to me by Jim, as he put it, I believe this chapter will be described as “The Phantom of the Fed Put revealed.” Please understand what is meant here. There is a “confidence” all over the world in not just the Fed but in ALL central banks. This is a misplaced confidence because the markets themselves are far larger than any single central bank or even ALL of them collectively. Yes, The Fed can push, pull, support and suppress …for a time. They cannot stop a broad tide from going out or prevent a tsunami from coming in over a long time frame. The current timeframe is six years, A LONG time for us Westerners, might as well be six days for those from the East. Does a Fed (central bank) put really exist? Or is it only the “belief” a put exists?

    My point is this, the only thing holding markets together is confidence …and the only thing keeping confidence from being shattered is the belief central banks are and will provide a “free put” to all markets.
    http://www.jsmineset.com/2015/06/27/beginning-of-the-ending-sequence/

  4. I smell that popcorn in the kitchen. Can’t wait to sit back in my barka lounger and watch the upcoming fireworks. I didn’t even need to buy tickets!

    Oh wait….I think I did pay (through the nose) these past few years…

  5. Regarding mutual funds; is it any type of safety haven to move from mutual funds to a money market account? or is that just a very convenient account to be stolen. The question relates to exiting mutual funds and paying taxes on what was to be retirement income.

      1. Dave, we have been on the edge of pulling the plug for some time now. Ths is the article that got us to decide a big tax bill is better than having nothing to pay taxes on and we closed the 401k – we will be 2+ weeks to receiving the check, depositing/hold and then pulling Cash. Thanks.

  6. ES futures already bouncing and potentially green by morning. As much as I’d love to see the “buy the dip” douchebags get crucified, this market just seems unbreakable until proven otherwise. I’m still holding IBB puts though.

  7. translation: “hey, corzine did it! we have to protect our relationship w/goldman…”

    what I don’t get is why risk asking for permission? there’s clear precedent they wouldn’t be punished for doing it anyway…

  8. If you would have done any research at all before writing about this, you would know this is has been approved in 14 major mutual fund companies and over half for more than 5 years.
    We can only hope you didn’t sway someone that needs these good bull markets to live off of in the next 10 years to put their money under their mattress.

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