You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. Make It a "BlackRock Night"...How the World’s Largest Extraction Machine Became Your Uninvited Landlord
Dear Fellow Traveler: You think you’re planning a quiet evening at home... Maybe order some pizza, stream a movie, and crack open a beer. Back in the 1990s, they used to call this a “Blockbuster Night...” A nod to the video rental store and its successful advertising campaigns. Tonight, it could be just you, your couch, and what you imagine is a competitive market where companies fight for your business. But once you put on the glasses... once you start seeing the ownership web...
You realize something fascinating… The same institutional investors keep showing up everywhere. Welcome to your “BlackRock Night.” Time for Dinner...You’re hungry. You open the Uber Eats app. That $18 pizza that used to cost $12? Suddenly, a guy in a perfectly pressed suit materializes behind your couch with a clipboard. “Hey there! I’m here representing the spirit of passive index investing. Did you know the same institutional investors… BlackRock, Vanguard, State Street… are top shareholders in Domino’s, Yum! Brands (Pizza Hut), AND DoorDash?” You hesitate. He adjusts his glasses. “Here’s the thing: when the same investors own significant stakes in competing companies, those companies face less pressure to compete aggressively on price. Why start a price war when your largest shareholders own both sides?” You realize you’re not just ordering pizza anymore. You’re participating in a market where competition has been... shall we say... moderated by overlapping ownership structures. The suit guy nods approvingly as you add extra cheese. Let’s Stream...You finish eating and reach for the remote. The suit guy is still there, now holding financial reports. “Netflix and chill? Interesting choice!” He flips through pages. “BlackRock owns about 30 million shares of Netflix. They also own stakes in Comcast, AT&T, and other infrastructure providers. Netflix pays for bandwidth.” That $21.99 subscription that used to be $7.99… Well… “When institutional investors own both content companies AND the infrastructure they depend on, there’s less incentive for either side to squeeze too hard on costs,” he explains. “Everybody’s in the same portfolio!” You’re not just paying for entertainment. You’re experiencing what economists call “common ownership” This is where the same investors hold stakes across an entire industry ecosystem. The Grocery Store RealityYou pause the show for a snack. The visitor now has spreadsheets covering your coffee table. “Midnight munchies reveal the most interesting patterns!” He points to charts. “That milk costs twice what it did five years ago, right? The same institutional investors often hold positions in dairy processors, packaging companies, AND retail chains.” He traces lines between company names. “It’s not a conspiracy. This is portfolio optimization. When you own the whole supply chain through index funds, you’re less concerned about any individual company’s margins and more focused on sector-wide profitability.” This isn’t price fixing in the traditional sense. It’s something more subtle. This is reduced competitive intensity when ownership structures align incentives across supposed competitors. Finally, BedtimeThe suit guy has changed into pajamas but kept his calculator. “Time for sleep in your appreciation-focused housing market!” he laughs. “Institutional investors didn’t just inflate housing costs. They created new asset classes around residential real estate while simultaneously owning the REITs, homebuilders, AND mortgage servicers.” He pulls up housing data on his tablet. “When the same investors profit from housing scarcity AND the financing mechanisms for overpriced homes, the incentives get... interesting.” You’re lying in a market that’s been optimized for asset appreciation rather than affordability, where key players profit from multiple sides of the same transaction. Sweet dreams… What If Ownership Were More Distributed?What if ownership were spread across thousands of independent investors instead of concentrated in a few massive funds? Companies might face greater pressure to compete on price rather than to optimize portfolio-wide returns. Housing markets might optimize for affordability rather than asset appreciation. Food systems might prioritize efficiency over margin protection across vertically related companies. Markets might become... more competitive again. But the suit guy adjusts his sleep mask. “We’re not villains,” he says. “We’re just following the logic of scale and diversification. It’s not our fault that passive investing at this scale creates market structure effects nobody really planned for.” Yeah… see… The markets created incentives… and they cashed in on it… Make It a BlackRock NightThe suit guy appears one final time, now holding a morning coffee. “Here’s the real insight,” he says, checking his portfolio app. “This isn’t about evil corporations manipulating prices. It’s about how market concentration through institutional ownership changes competitive dynamics in ways most people never consider.” “You can still make choices,” he continues. “But understanding the ownership structures behind those choices helps explain why some markets feel less competitive than they used to be.” The glasses are on. You can now see the ownership patterns behind market behavior. The game isn’t rigged in the traditional sense. But it’s definitely being played with a different rulebook than most people realize. The question is… are you paying attention… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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