A BlackRock Apologist Market

• Author: Jacob Greene
• Posted: 2023-12-21

There are a lot of cynical people in the nation today; many Americans who always suspect ulterior motives. And for a nation that's perpetually awash in some scandal at the highest tiers of society, people have a right to display their cynicism. Like, for instance, when a government-backed real estate organization, BlackRock, starts going around spending multiple billions of dollars buying up every residential home they can find, in good, peaceful, suburban neighborhoods. What are they up to? This is yet another area where Americans are divided, much like politics, race and religion. Some claim BlackRock is just an exemplar of how capitalism should operate, while others claim that they're a nefarious organization whose actions will damage the housing market.

Which one is true? Perhaps neither; perhaps both. It is impossible to say at this moment what consequences BlackRock's actions will have. As of June 12, here's what we know: BlackRock is a huge real estate firm that just so happens to have the backing of the federal government should their investments fail. They have been around since 2003 and operate essentially as a private business with guaranteed funding from the public trust.

Does anyone out there reading this remember when this sort of thing was frowned upon, particularly after the 2008 housing collapse and the Occupy Wall Street movement? Well, we wish you the best of luck in finding any mainstream media sources even questioning BlackRock, much less standing against what they're doing. Which also means that the audience of this media is entirely on board with BlackRock's purchasing of so many thousands of properties. The issue here is that this has by extension caused any questioning of or push-back against BlackRock to be considered "alt-media" conspiracy theories.

It's a hard pill to swallow for people critical of BlackRock. After all, what's conspiratorial about the undeniable facts that predatory lending and federal-backed real estate firms played a huge role in creating a housing bubble that burst and nearly sent the entire planet into another depression? Though because mainstream media say BlackRock is the good guy, the rest of the nation has to either agree or be labeled as some brand of bigot for not abiding the common societal standard of blindly agreeing with huge media companies who are all 100% owned by massive corporations, by the bye. But let's not think too much about that, or else one might find a connection and risk being called a conspiracy theorist.

The fact is that BlackRock is buying up many thousands of homes and is paying far more than market value for them. This, even on its face and assuming it will be the only negative consequence, is forcing the market to artificially inflate its rates for other companies, and it's also forcing independent home-sellers to artificially decrease their rates so that their homes stand out as a better deal.

There was an anonymous social media comment about this situation, supposedly from an economist who did not wish to cause waves, who said on the matter: "In America, we strongly regulate the onion market. Yes, it's true; one cannot go and buy up all the onions and tamper with how the market is organically in flux, as [doing so] will harm onion farmers and sellers. But the housing market is something the government has never really regulated and has instead stood back while companies tamper with everyone's lives and make billions of dollars in guaranteed money. For even if the market fails and these companies are threatened with bankruptcy, [the government] will bail them out. The people who cause the damage will be taken care of, while the people who suffer from the damage are forced to fend for themselves."

What Critics Fear the Most

Is BlackRock really that bad? Are they doing something against the law? No, they are acting perfectly within America's modern version of "capitalism", and that's what's driving a lot of critics crazy. No one knows what BlackRock is going to do with these properties, but there are some things we know about the history of housing that really make this all seem scary.

Firstly, investors always sell for more. This means these homes are very likely to be given out to people who sign off on adjustable-rate mortgages and end up paying exponentially more than market value in the long run. Secondly, BlackRock, if they follow the template of other government-backed firms, will likely target minorities when selling the homes. They will offer minorities relatively low entry criteria, and then continue to draw interest, and will likely end up in the coming weeks making deals with HUD and the Biden administration for guaranteed repayment. Then it's more minorities with bad credit and without homes once their spike the rates.

Critics fear this is the beginning of a crisis far worse than 2008.