Called it. ESG Market Manipulation
"The U.S. Securities and Exchange Commission's probe is focused on whether managers of environmental, social and governance (ESG) funds are trading away their right to vote on such issues, the report said on Monday, citing four people with knowledge of the matter.The investigation delves into whether asset managers are making the proper disclosures to investors, according to the report.The SEC did not immediately respond to a Reuters request for comment.Regulators have been making efforts to contain the risk of money managers overstating the ESG credentials of their products, which have racked up trillions of dollars." - Reuters
My guess and belief is this is much larger of a case than trading votes on false fund information and the alike.
How is this entire ESG pledge not a breach of Sherman Anti Trust Act and collusion for market manipulation?
We'll see how this whole thing plays out
While it sounds like it could be pretty brutal, let's be real here. This is the SEC. All that would happen at most is a slap on the wrist, some watered down fines and a hard finger wagging telling them not to do it again. Then a buried story about how the investigators jumped ship to get hired as internal counsel for these firms as a horse trade.
Can you clarify why an ESG focused investment strategy is a breach of the Sherman Anti Trust Act? The quote you provide doesn't actually say anything - I'm sure it's possible certain fund managers are not making proper disclosures to their investors, but I'm unsure how that's relevant. You could say the same about any group of fund managers.
Yup - will post a legal argument on this later
Because the "investors" shilling for it are BlackRock and State Street, who can shut any company out of the public markets for not playing ball.
Why is it that from ESG investing, to limited heating in the winter, to reducing care ownership, to carbon credit scores, to less meat, etc., every "green" initiative is basically directed to make everyone's lives worse?
But this isn't an argument against ESG investing, it's an argument about letting private capital aggregate to the extent it has. This is entirely my point. You've happened upon an actual social ill (a.k.a. "capitalism") and instead of calling it what it is, a problem in need of government intervention to allow for competition, you've unconsciously understood where that leads and instead are focusing on what you think is the liberal agenda of those capital allocators.
Who gives a flying fuck what BlackRock and State Street are "shilling" for. The fact that they can warp the capital markets by dint of their size is the problem, and not the way in which they choose to warp.
Because people have gotten used to passing off the externalities of their comfort on to others. Do I want my home to be 90 degrees in winter? Maybe. But I also don't want my home flooded because global climate change is causing extreme weather events to happen more frequently. Do I want a 16oz ribeye for every meal of the day? Maybe, but I also want to have clean, cheap drinking water. Maybe the person wanting the first parts of those sentences is an upper middle class family in Pennsylvania who like steak and loves a hot house; but for them to have steak every other day and have the house heated to 80 degrees is an incremental comfort, whereas a family living in New Orleans is in far more visceral danger from a hurricane, or the family in New Mexico is in far more danger of not being able to find safe drinking water, and some people in this world think it's reasonable to ask that the Pennsylvanian family give up the tiniest marginal bit of comfort so that the New Orleans and New Mexico families can, you know.... literally keep on living.
Humans are really, really bad at recognizing long term costs. Yes, everyone would be happier if everyone could do whatever they wanted, all the time, without consequence. But that's not possible, and society as a whole exists in large part because people realize on some primal level that we all have to give up certain freedoms in order to peacefully coexist.
Where I believe ESG is a breach of the Sherman Act is in it’s “pledge.” By businesses “pledging” to enact ESG measures such as not funding oil exploration or processing, businesses are essentially colluding through a third party - the world economic forum and their pledge. That is illegal. On top of that, all of these ESG pledged firms are likely trading against the oil equities. That’s speculation we don’t know that for sure but would they not if they refuse to fund them or cut their revolver on further funding? They’re also all dumping their money simultaneously towards ESG approved / green public and private equities. This is the biggest case of collusion the US has probably ever seen. What’s extraordinary about this case, however, is this is supported by the current administration and other world governments. Which, essentially, is enablement of collusion. It’s really quite incredible when you actually stop to think about it from a higher level.
My argument is one of legality and morality. Hence my username, I’m a proponent of the free market. I’m all for actors acting as they wish in the market just as long as it is within the confides of the regulatory guard rails we have in place to support further competition. ESG is collusion that essentially stifles competitive free forces and thus liberty for individual actors on the other side of this market trade. This is the start of a complete erosion of free market principles, in my belief. And I say that with a very level head - take two steps back and analyze this entire ESG system, without it’s promises. This is corruption and collusion
Bump bump bump - read all about it. I value all perspective, truly. Im an intellectual in search of truth. Read this, analyze the ESG system in your own mind, the Sherman Act, and come to your own conclusion. If you believe I'm misguided or wrong in my analysis, would love to hear your opinion.
I utterly loath ESG and it burns a hole in my desire to do deals at all when that's the key angle. I can understand the desire to run businesses in more sustainable ways that are more conscientious of negative externalities, but what it's morphed into within government mandates and the actual implications of certain demands is unacceptable. Look no further than what's happening with farmers in the Netherlands to see where this type of stuff is heading. Plus the top down implications of large institutions like Vanguard/Blackrock making them requirements for broad participation in the public capital markets is starting to get into some murky territory.
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