New Finacial Instruments?

[Aimless]

3) An understanding of the warehouse rates. All the NYT reporter has is an unnamed "expert" in paragraph 15 who claims this is raising prices. This expert is probably the person who pitched the story, probably has a financial interest in somehow hurting Goldman and isn't identified at all.

Yeah Dread it's probably the same shady ninja-expert who's been going around joining the companies who use the aluminum in order to shadily convince them to lodge complaints with both regulators and the LME about the consequences of these warehousing practices.

[Aimless]

More on the topic, and it's easy to see this has been a while in the coming and supported by more than just NYT:

http://www.ft.com/intl/cms/s/0/c04c5...44feabdc0.html

http://www.crugroup.com/about-cru/cr...dwest_premiums

http://ftalphaville.ft.com/2013/07/1...ect-in-metals/

[Aimless]

Explaining some of the situation using scripture:

http://ftalphaville.ft.com/2013/07/2...ith-scripture/

I wonder, if Goldman Sachs is Joseph in this story, who is the Pharoh?

[LittleFuzzy]

Minx, can I ask you to either provide quotations or stop leaving links to sites that don't let non-members access the text as the only material in your posts?

[Aimless]

I just don't want to risk angering the copyright gods

[Dreadnaught]

Yeah Dread it's probably the same shady ninja-expert who's been going around joining the companies who use the aluminum in order to shadily convince them to lodge complaints with both regulators and the LME about the consequences of these warehousing practices.

More on the topic, and it's easy to see this has been a while in the coming and supported by more than just NYT:

http://www.ft.com/intl/cms/s/0/c04c5...44feabdc0.html

http://www.crugroup.com/about-cru/cr...dwest_premiums

http://ftalphaville.ft.com/2013/07/1...ect-in-metals/

You mock your own idea, but I'm glad you've finally arrived at the plausible explanation for this story's origin. Ironically, I think I'm more cynical about business than you are.

This story was probably pitched to the NYT by a PR person working on behalf of an aluminum customer frustrated at Goldman's shitty management of this warehouse. The increased storage premiums is annoying, but it's more than counteracted by the overall aluminum price decrease. What's more annoying to the consumers is the delay getting aluminum supplies on the spot market when, say, a soda bottler needs more aluminum than they have in their inventory.

When Goldman bought it, they may have slimmed down the staff to save costs. Or maybe this is also a malicious way to increase storage fees. Who knows? But, as Fuzzy points out, anyone could be running a warehouse this way. Hell, I could do it.

But the aluminum consumers are being smart by having their PR people blather-on about Goldman, pricing fixing and commodity market trading. And they tout-out this bullshit back-of-the-envelope calculation about price increases that makes no sense in the context of the wider aluminum market. Coupled with a famously anti-corporate NYT reporter and we have this.

[Wraith]

I just don't want to risk angering the copyright gods

This site has safe harbor status. The worst the copyright gods can do is ask us to remove individual posts, and they're unlikely to waste their time.

[GGT]

The things is, GGT, that this has nothing to do with a being a financial institution, however shady it looks. Disney could have done this. Or Apple. It would still be just as shady.

Agreed, no matter who's doing it, it's still shady behavior. The thing is, Fuzzy, that this kind of behavior is common in powerful industry sectors with ties to high-finance. They have a symbiotic relationship based primarily on profits, regardless of business ethics or common morality. Those profits can mean exploiting tax loopholes, cornering a commodity, manipulating costs, sheltering profits, creating off-shore subsidiaries, etc.

That behavior can't happen without financial institutions participating or colluding.

[GGT]

A more recent Business Insider article that pieces the puzzle a bit better:

How The Financial Crisis Helped Turn Big Banks Into Global Commodities Kings

Read more: http://www.businessinsider.com/banks...#ixzz2bjJp7CCP


That Grandfather Clause for bank-holding status was a crappy move.

It didn't take much for Fed and Treasury -- in hair-on-fire emergency meetings -- to convince congress they could save the global financial system from meltdown, without much congressional oversight. Too bad the article doesn't suss that out, but I wouldn't call it an unintended consequence of crisis-chaos. September should be an interesting month.