Loading ...An Inadvertent Warning From BlackRock – Get Your Money Out Of Mutual Funds ASAP
Tyler Durden on 06/29/2015 11:00 -0400
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.