The advantage that emerging markets had in terms of low labor costs is diminishing, said Fink, 60, who co-founded New York-based BlackRock in 1988 and as CEO has built it into the largest money manager, with $3.86 trillion in assets as of June 30. North America is gaining a manufacturing edge because of low energy costs, he said.
Mexican President Enrique Pena Nieto’s decision to open up his country’s national oil monopoly will lead to an investment boom there, Fink said.
“Certainly Mexico is at the beginning of a real revolution,” he said.
Mortgage Dispute
At one point, Fink and Gross had questions shouted at them by two audience members, one of whom identified himself as a representative of the Service Employees International Union. The two challenged the pair over BlackRock and Pimco seeking a court order blocking Richmond, California, from seizing mortgages through the legal process known as eminent domain so that the occupants can have their delinquent loans restructured. The hecklers were escorted from the room.
“The use of eminent domain for mortgages instead of real property is questionable,” Fink said. “It’s breaking quite a bit of what we would consider contract law. We’ll go to court and see who’s right.”
Gross said more regulation and higher taxes may be needed to address wage inequalities that have created animosity between Main Street and corporate America.