DISQUS

Not Allowing False Blame! · 4 months ago

Agree with your too big to fail concerns. Systemic risk created by large institutions, a reasonably new concept, has now once again been stricken from the lexicon. But why you blame the ETF market is inconceivable. This is a deal for all of BGI, not just Ishares, so includes their entire indexing business. ETF assets are less than 1/3 of the assets included in this deal. And really, ETFs do live up to all of their diversification and cost savings claims, with additional benefits. They work for investors more than any product ever has, most importantly in cheaply taking away the disasters that frequently occur with single stock picking. Lastly, I wonder how much of Stocktwits stream revolves around ETFs, and what it's potential survival assumptions would look like without them?

aweissman · 4 months ago

Brilliant. To small to fail ftw.

jeremystein · 4 months ago

you really nailed it: "understaffed and undertalented SEC."

you think thats because the best and brightest at the sec are trying to get (and have gotten) the best jobs at the banks?

re etfs: you know the system is out of control when "investment" products are being built on top of derivatives. if no one exchanges physical goods in those markets anymore-- what do you really own?

howardlindzon · 4 months ago

No...they are busy daytrading and stealing. Asshats.

marketfolly · 4 months ago

I'm actually of the belief that ETFs as an asset class will continue to see capital inflows as your average financial advisor/planner shifts joe schmoe into ETFs rather than mutual funds, mainly as you point out, as a means of cost savings. At least, from here into the future.

I think the top is more-so in the creation of ETF vehicles themselves. triple leveraged, quadruple leveraged, etc. Hedge fund strategy ETFs coming out with a new one each week. Can't wait until we see a triple inverse MBS etf. Eventually the ones based on stupid ideas will lose assets and fall off. But, the major index based and useful ones will continue to exist and steadily garner assets. Just my .02, as they're liquid vehicles for the most part.

Mark · 4 months ago

Do regulators have an obligation to shareholders? They should stop the deals b/c they ultimately require the taxpayer to backstop losses.

howardlindzon · 4 months ago

Agreed. Its criminal negligemce

steve · 4 months ago

Blackrock has become a quasi-gov't institution - think Fannie or Freddie without the massive leverage. They and GS are the main beneficiaries of the TARP, TALF, ... They will continue to benefit as one of the "choese" companies in our ever more statist economy.

mos def · 4 months ago

I totally disagree with your thoughts about the Barclay ETF business purchase. The IShares portfolio is the best in the business with huge future asset growth ahead of it. If I was forced to buy one asset management business and hold it for the next 20 years it would be the IShares portfolio.

Great product, great value for investors, substantial barrier to entry. When you are the biggest AUM with the best product you can always compete on price. IShares is the Wal-mart of the investment management industry.

Troy · 4 months ago

Thank you for being one who is at least thinking of the "Too Big To Fail" issue. I cannot believe that the government is bailing out so many banks and investment firms and then allowing one to get bigger than any of the already failed firms. This is not rocket science, but somehow the obvious keeps getting lost.

It is true that large does not mean good. All of these companies claim that there is so much cost savings, but they do not lower the fees just the number of employees. They do not even close the extra offices. They do not invest the money with any more skill than before they became oversized.

Take care,
Troy