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A Shuffle of Aluminum, but to Banks, Pure Gold
Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.
The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.
This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country.
Tyler Clay, a forklift driver who worked at the Goldman warehouses until early this year, called the process “a merry-go-round of metal.”
the efforts by Goldman and other financial players has cost American consumers more than $5 billion over the last three years,
The maneuvering in markets for oil, wheat, cotton, coffee and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cellphone
Using special exemptions granted by the Federal Reserve Bank and relaxed regulations approved by Congress, the banks have bought huge swaths of infrastructure used to store commodities and deliver them to consumers — from pipelines and refineries in Oklahoma, Louisiana and Texas; to fleets of more than 100 double-hulled oil tankers at sea around the globe; to companies that control operations at major ports like Oakland, Calif., and Seattle.
Before Goldman bought Metro International three years ago, warehouse customers used to wait an average of six weeks for their purchases to be located, retrieved by forklift and delivered to factories. But now that Goldman owns the company, the wait has grown more than 20-fold — to more than 16 months, according to industry records.
Metro International holds nearly 1.5 million tons of aluminum in its Detroit facilities, but industry rules require that all that metal cannot simply sit in a warehouse forever. At least 3,000 tons of that metal must be moved out each day. But nearly all of the metal that Metro moves is not delivered to customers, according to the interviews. Instead, it is shuttled from one warehouse to another.
Because Metro International charges rent each day for the stored metal, the long queues caused by shifting aluminum among its facilities means larger profits for Goldman.
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http://mobile.nytimes.com/2013/07/21...?from=homepage
Yawn
Translation: they're trying to create De Beers diamond mine style monopolies over all commodities. That's gonna make everything more expensive.
The owner can store aluminum just about anywhere. I am suspect of the motives of the writer here. Hot GS.
what do you suspect?
do you DENY the writer telling the truth about GS hoarding aluminum?
They supply the warehouses that the owners store it in.
The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum.
GS owns the aluminum, and they prevent from being delivered to the market by moving it around from warehouse to warehouse.
They did the same with 5 tankers of oil in early 2008, parked them in the Caribbean, then bid the price of oil mid-year to $148, then sold oil the tankers.
Where's your evidence?
"Do Your Own Research"
--WC
If they are buying aluminum, it;'s because prices are low. The supply is in excess of demand right now. They aren't keeping any from being sold. get your facts strait. Right now, it's a great investment, especially since major aluminum producers announced they will cut production.
Any idea how many weeks it takes to resume production? Alcoa is cutting two cell lines to reduce production. Other producers are doing the same. It's not GS trying to manage the prices, it's the aluminum producers. GS is just smart enough to buy low, sell high. Aluminum isn't something you just ramp up or down in any quick manner.
LOL...
You obviously haven't...
WC apparently has no issue in sandbagging on essential commodities so multinational conglomerates and their top shareholders can rake in the big bucks.
This is precisely the abuse of market position that the anti-trust and similar laws were created to stop.
I posted the original msg. you posted nothing but bull
I don't doubt it. I went 70 miles offshore in the Gulf of Mexico bill fishing a couple of years ago when oil/gas prices were ing. There were at least 20 deep loaded tankers anchored 20-50 miles offshore that I saw in just that one section of the gulf. These were not tankers temporarily anchored waiting for a pilot to take them in from the whistling buoy...these were long term anchored waiting for orders to move. You really can't deny that there is some manipulation in the commodities market.
I'm sitting on a couple of thousand pounds myself so I don't mind if I make money when they make money.
Oh, and Boutons...you don't corner the oil marker with 5 tankers.
bankers can extract wealth out of everywhere, most times at the expense of our money or the government's, and they're always shamelessly enjoying doing so.
straw man, thanks for knocking it down. nobody but you said that.
The G-S trader cleared over $200M on that deal, IIRC.
This might be happening, but you have to really have a large stake to be able to control the market like that. Now in the case of aluminum, wec do have a verified excess of aluminum. Aluminum production isn't something you can just turn on and off at will. It takes several says or weeks to start or stop a cell in a cell line, and expense. Therefor, these companies have rather consistent production rates. Currently, an excess and they finally decided to turn off cell lines.
Now in the case of these GS warehouses. I'll, bet since inventory isn't moving, they have some kind of a issue with union workers. They probably want to cut hours or lay off people, but are likely prohibited from such things, by contract. I'll bet that what's happening is they are making "busywork" to keep the employees from sitting on their asses. Possibly trying to make some quit their union protected job.
One more thing I noticed.
The source no longer works for Goldman Sacks.
Was he fired, or did he quite?
Disgruntled maybe?
What is the truth of this matter. Who else has stepped up? Nobody that I've seen...
WC never misses a chance to defend the organization that's screwing Human-Americans, NEVER.
It's not that.
I simply cannot stand propaganda being generated by ignorant s.
What do you have past the allegations of a former employee?
google "banks traders hoarding rigging oil aluminum copper commodities markets" and various other terms, plus remember the Hunt Bros, Dallas assholes, trying to corner the silver market.
"Do Your Own Research" -- WC
If the ex-employee is slandering, why isn't G-S's army of lawyer s suing him?
They buy low, and hold it till the prices rise. That's what everyone tries to do with commodities.
US commodities markekt is regulated by the captured USDA because it was originally meant to help non-corporate farmers minimize price swings. Now it's dominated, rigged by 100% speculators, "financial capitalism", adding $Ts to commodity prices, as another tactic to extract wealth from the 99%.
An oil exec testified before Congress that probably 30% of the price of oil was due to speculators, not supply/demand.
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