BlackRock, Larry Fink and Spain's pending housing bill

BlackRock, Larry Fink and Spanish land: the pending bill

The world’s largest investment fund manages other people’s money. That detail, which should be the starting point of any serious discussion, is almost always lost under the question of who really holds power. The meeting between the Prime Minister and BlackRock CEO Larry Fink to ease shareholder tension at Telefónica —and the simultaneous criticism from ERC and Unidas Podemos for holding it during negotiations on the housing law— has placed the asset manager at the center of two issues that until recently were separate: who controls strategic companies and who decides where people can live.

BlackRock is not an opportunistic local fund. It is the largest asset manager on the planet. And that changes the analysis significantly.

Does BlackRock own everything it buys?

No. Or not exactly. The technical nuance matters: the firm buys shares for its clients' funds, so those stakes do not belong to it, but are acquired gradually to boost third-party savings plans. It manages, it does not possess. The confusion sells headlines and scares for free.

However, the scope is gigantic. There is a cross-shareholding between BlackRock and Vanguard —each owning shares in the other—, a corporate knot that explains why almost any large listed company ends up having the same firms in its shareholding. When people talk about owners of the world, that is the root of the rumor. And it is worth separating it from the fact.

Housing: funds buying apartments and keys being claimed

Here the issue becomes less theoretical. The most repeated accusation is that investment funds buy housing and block people's future, alongside a housing law whose negotiation coincided with the President's meetings with major investors. From this comes the harshest reading: that what little remained was auctioned off at bargain prices.

That is, for now, a position. What appears as concrete testimony is the case of an owner who, according to that account, was asked by their town hall to hand over the keys to an owned apartment, within the framework of a major urban development project. There is no possible verification, and therefore it should be read as what it is: a sign of social nerve, not proof. Private property stops seeming bulletproof when a greater interest looms behind it.

The underlying conflict is not whether a fund buys a building. It is whether it can also buy the rule that decides what gets built.

Pensions: securitizing the system and guessing who arrives last

The second derivative is the pension. In the shared material there is a minute reference —around minute 3:10— claiming that the next move is to securitize pensions, that is, turn them into another financial asset. If that happens, the issue ceases to be one of asset managers and becomes one of the social contract.

The most repeated thesis is uncomfortable: the public system is unsustainable by design and the last to join ends up paying for the party. Translated: young people. It is not a proven fact, it is a stance, but it explains why the meeting with Larry Fink is read as a warning and not a diplomatic anecdote.

Larry Fink, Davos and the housing law: the clash of criticisms

The Prime Minister defended his meetings with major investors in Davos against criticism from his own coalition partners and ERC. The official defense is attracting investment; the critical reading is that deals are negotiated with those who later condition housing policy. Both things can be true at once. That is the problem.

The demographic background worsens the feeling: an economy with fourteen million singles and birth rates hitting rock bottom leaves little room for optimism. The floating question is not if capital enters, but under what conditions it exits.

What to do with savings when the State won't bail you out

Amid the noise, there is a textbook story that deserves calm. Someone invested in ETFs tracking the S&P 500, London's FTSE, technology and REITs —the so-called iShares—, then moved the money to Amundi index funds (Europe, EU and UK, Japan and Asia-Pacific) and ended up selling when the custodian bank started charging its own commission. They made 4,000 euros. Not for being a wolf of Wall Street, but for entering when central banks were printing money like there was no tomorrow.

From this comes a conclusion that is not advice: save, make your money work so inflation doesn't eat it, try to have owned housing even if it hurts for a few years, and don't trust that the State will appear to pay the pension. Everything else, almost always, is smoke and mirrors.

The bill hasn't arrived yet. When it does —and it will come via housing, pensions or land— it will probably already be securitized and in the hands of someone who bought cheap.