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11 January, 2017

Τhe computer that controls 7% of world's wealth


In a tiny town in the Far North-West of the United States called East Wenatchee, a giant computer whose job was to make the future predictable was built. The man building it was a banker called Larry Fink.

Back in 1986, Mr. Fink's career had collapsed. He lost 100 million dollars in a deal and had been sacked. He became determined it wouldn't happen again. Fink started a company called BlackRock and built a computer he called Aladdin.

It is housed in a series of large sheds in the apple orchards outside Wenatchee.

Fink’s aim was to use the computer to predict, with certainty, what the risk of any deal or investment was going to be. The computer constantly monitors the world and it takes things that it sees happening, and then, compares them to events in the past.

It can do this because it has, in its memory, a vast history of the past 50 years. Not just financial, but all kinds of events. Out of the millions and millions of correlations, the computer then spots possible disasters, possible dangers lying in the future and moves the investments to avoid any radical change and keep the system stable.

Aladdin has proved to be incredibly successful. The assets it guides and controls now amount to 15 trillion dollars, which is 7% of the world’s total wealth.


From the documentary HyperNormalisation by Adam Curtis

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Well, actually, Aladdin's job is not to keep the system stable, as Adam Curtis says. Otherwise, it could somehow prevent the big financial crisis of 2007-08. Aladdin's job is only to predict events in order to protect and enlarge the investments and earnings of BlackRock's major shareholders and clients. This is the main reason for which Aladdin has proved to be incredibly successful.

Just note that due to its power, BlackRock has been called the world's largest shadow bank.

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