[HN Gopher] BlackRock 2023 Outlook [pdf]
___________________________________________________________________
BlackRock 2023 Outlook [pdf]
Author : baal80spam
Score : 38 points
Date : 2022-12-08 20:42 UTC (2 hours ago)
(HTM) web link (www.blackrock.com)
(TXT) w3m dump (www.blackrock.com)
| qclibre22 wrote:
| There's old saying in finance: "Never trust an analyst".
|
| If the analysis is so great, it won't be distributed on the
| internet for free. These financial management firms are always
| "talking their book", that is they cherry pick their data to
| support their portfolio.
|
| Black Rock has seriously underperformed compared to XLF ( ETF for
| finance) year to date.
|
| Perhaps they are just looking for excuses.
| aftbit wrote:
| Leaving aside the question of whether it's portfolio appropriate
| or a good idea, how does an individual reasonably invest in
| global investment grade credit or inflation protected bonds?
|
| I see TIPS in the US paying at ~1.5% while 5 year T-notes are at
| 4+%. Assuming that inflation will continue to drop, but remain
| above the target, wouldn't we expect to see T-bills and T-notes
| continuing to outperform TIPS?
|
| Surely I am misunderstanding something...
| makestuff wrote:
| On interactive brokers you can modify trading permissions to
| trade fixed income products. I assume other brokers have
| similar settings.
| drexlspivey wrote:
| TIPS yield are real yields (already adjusted for inflation)
| while T-Notes aren't so they aren't really comparable. In
| essence you are getting 1.5% on top of inflation.
| daydream wrote:
| Starting with I bonds is your best bet as an individual. Though
| there's a cap on how much you can buy per year.
| canadiantim wrote:
| BlackRock, foxes and hen house
| jcampbell1 wrote:
| BlackRock has been promoting ESG, and Larry Fink has been
| aggressively defending it publicly. ESG is questionably
| compatible with being a fiduciary. What really bothers me about
| Fink is that BlackRock has been buying up every ESG consulting
| shop, and selling corporations on ESG and implicitly dangling
| capital injections as a carrot. I sincerely hope this strategy
| backfires.
| mushufasa wrote:
| here's the direct link
| https://www.blackrock.com/corporate/literature/whitepaper/bi...
| stareatgoats wrote:
| > Central banks are deliberately causing recession by
| overtightening policy to tame inflation, in our view.
|
| I didn't read the whole report, but a cursory glance revealed the
| above quote in the lede. Which seems interesting to me, that one
| of the largest (maybe the largest?) investment management firms
| in the world has a different take on inflation taming than
| central banks. Maybe it's only natural; they see a willed
| recession on the horizon which will obviously hurt their bottom
| line.
|
| Maybe they don't even have an alternative strategy, but I'm
| personally wondering if hiking interest rates on top of soaring
| energy prices is really the best we can come up with. Is it?
| RC_ITR wrote:
| It's a matter of different incentives.
|
| The Fed is _trying_ to reduce prices in asset markets.
|
| Asset prices growing faster than our ability to make things is
| a sure-fire cause of inflation (more stock-based billionaires
| chasing the same amount of houses makes all house prices go up,
| as an extreme example).
|
| Blackrock just wants to have as many assets under management as
| possible (that's how they make money), and one easy way to
| goose that number is to have your existing assets go up in
| price (and vice versa for falling prices).
|
| So yeah, Blackrock is rightly mad at the Fed and will probably
| say a lot of mean things about them.
|
| Doesn't mean the Fed isn't doing the right thing though.
| nly wrote:
| It's not billionaires pushing up house prices but the middle
| class .. like me
|
| I'm in the top 1% of UK salaried income and a family home is
| not affordable in an area I'm willing to commute from.
|
| To buy a family home I'd be paying almost as much as a whole
| year of the UK annual after-tax s just in stamp duty
| (transaction tax).
|
| Things have gotten out of hand.
| mistrial9 wrote:
| if a person with access to much more credit than you, and
| has more cash than you, is competing with you to get a
| house when there are not many houses, how can you be the
| cause of the increase in price?
|
| secondly, if the entire house market is so over-priced that
| only people that have a house to sell, and new cash, and
| substantial access to credit are the ones getting any house
| at all, how is the cause of the price rise the buyer?
|
| thirdly, if the total capital in the system has been
| multiplied by QE and network effects on assets, such that
| you the middle-class buyer are not able to afford even a
| bid, how is that the result of the middle-class house
| buyer?
| majormajor wrote:
| Top 1% of income isn't middle class.
|
| Lot of folks in the top 1% who have a lot of equities
| investments - those get inflated, makes it easier to borrow
| more, pours gas on bidding wars.
| nly wrote:
| High income has nothing to do with class or wealth.
| Scoundreller wrote:
| Arguably, if you have to go to work for money and need
| loans to buy shelter, you're not upper class.
| [deleted]
| jakeinspace wrote:
| I don't believe you're middle class mate. Though I realize
| that the British definition is more grounded in upbringing
| and family history than the American usage.
| osrec wrote:
| Upper middle class may be more accurate.
| wwweston wrote:
| Blackrock is, of course, free to start making things, or to
| increase their assets by buying from people who are.
| FridgeSeal wrote:
| Ppppphhh meaningfully contribute instead of just leeching
| out passing value like some kind of parasite??? What a
| crazy idea.
| Scoundreller wrote:
| Can't do A in a suit, and can't do B when outflows are your
| problem and nobody will loan you their money for free to
| buy more stuff.
| HDThoreaun wrote:
| This is pretty much the same view central banks have, just
| stated from a different perspective. Inflation happens when
| demand outpaces supply, so to curb it you either increase
| supply or reduce demand. Central banks control monetary policy
| which really only affects demand, so when they want to lower
| inflation they cause less goods to be demanded by increasing
| unemployment.
| mdcds wrote:
| Just something to think about: Fed Funds rate follows the
| 2-year treasury with a lag.
|
| What BlackRock calls "deliberately causing recession", I would
| call "following the signal from the bond market"
|
| Chart:
| https://stockcharts.com/h-sc/ui?s=%24UST2Y&p=W&b=1&g=0&id=p4...
| mdcds wrote:
| Actually, the relationship with 6-month treasury is even
| stronger:
|
| https://stockcharts.com/h-sc/ui?s=%24UST6M&p=W&b=1&g=0&id=p1.
| ..
| kitrose wrote:
| This is all circular because the treasuries are being priced
| based on the expectation of the rate changes.
| keewee7 wrote:
| BlackRock is an investment management firm that sells index
| funds. They want a bullish market but with just enough
| uncertainty and doubt that investors pick their index funds
| instead of hand picking stocks.
|
| Governments and central banks have other incentives than
| BlackRock. For governments temporary recession is better than a
| state of long-term high inflation.
| tdullien wrote:
| I don't think that they have a different take than the central
| banks, but the central banks don't advertise openly how
| interest rate hikes "tame inflation".
|
| In the end, you cannot have any durable inflation without wage
| increases - supply shocks can cause temporary inflation, but
| long-term you need a cycle of wage increases that lead to price
| hikes to perpetuate inflation.
|
| The way that tightening policy tames inflation is by choking
| off enough of the economy to ensure that demand for labor is
| reduced to the point where labor no longer has bargaining power
| to obtain wage increases.
|
| This is clear to anyone that follows economics, but it's
| sufficiently inflammatory that it's not expressed in plain
| language. You tame inflation by tanking the economy just enough
| so that employees lose their bargaining power, and hopefully
| not more - but you can't achieve that without creating a
| certain level of unemployment, otherwise employees keep their
| bargaining power.
| shaburn wrote:
| Considering these guys are paid to do virtually nothing managing
| capital and are being blindsided by ESG backlash, you may want to
| take their report with a shaker of salt.
| cschmidt wrote:
| I find it kind of strange that the products many of us have our
| money in are so static. I use the Schwab robo-advisor. It re-
| balances to a target allocation. But moving to high inflation
| regime with a recession on the horizon, with the fed hiking
| rates, and absolutely nothing changes in my portfolio.
|
| They are doing tactical over- and under-weighting of sectors and
| asset classes in this report. What can retail investors invest in
| that does the same thing as the big guys?
| jonwinstanley wrote:
| Presumably they are reducing your risk to ensure your money is
| safe?
| cschmidt wrote:
| No not all. They rebalance only to get you back to a target
| allocation. I think that's true of virtually all robo
| advisors, and many human advisors too.
| tdullien wrote:
| Robo advisors don't model interest rates at all. They
| essentially just estimate volatility of asset classes and do a
| round of Markowitz Portfolio optimization; they are easy to
| build (it takes a few days only). There is very little smarts
| behind them.
|
| They exist because in the past, private banks wealth management
| would charge customers 2% of assets per year for running the
| optimizer once a month (which made sense in the 1970s when only
| banks had computers big enough to do it).
| cschmidt wrote:
| So what is a better alternative for a retail investor to do
| top level portfolio optimization?
| candyman wrote:
| These guys are legacy.
___________________________________________________________________
(page generated 2022-12-08 23:00 UTC)