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Here Are The Highlights From The Senate's Finding That Banks Manipulate Physical Commodities - Live Hearing Feed
After two years, and 396 pages of report, the Senate investigations committee finds (translating their gobbledygook into English) that the banks did indeed corner and rig the commodity market. As Bloomberg reports, the Senate panel said the firms have eroded the line separating banking from commercial activities to the detriment of consumers and the financial system. The holdings give banks access to non-public information that could move markets and increase the likelihood that industrial accidents will spur taxpayer bailouts, the report said... (i.e. manipulated the system). The hearing, involving bankers from Goldman, Morgan Stanley, and JPMorgan begins at 930ET...
Full report can be found here (PDF)
Selected Excerpts (h/t Manal):
“One focus for the subcommittee is the management of Detroit-area metal warehouses run by Metro Trade Services International, the largest U.S. warehouse company certified to store aluminum warranted by the London Metal Exchange for use in settling trades.
Since Goldman bought Metro in 2010, Metro warehouses have accumulated up to 85 percent of the U.S. LME aluminum storage market...
Since Goldman took over the warehouses, the wait to withdraw LME-warranted metal has increased from about 40 days to more than 600 days, reducing aluminum availability and tripling the regional premium for storage and delivery costs...
The investigation revealed a number of previously unknown details about these deals: that Goldman’s warehouse company paid metal owners to engage in “merry-go-round” deals that shuttled metal from building to building without actually shipping aluminum out of Metro’s system; that the deals were approved by Metro’s board, which consisted entirely of Goldman employees; and that a Metro executive raised concerns internally about the appropriateness of such “queue management.”...
Goldman didn’t just store aluminum; it was involved in massive trades of aluminum at the same time its warehouse operations were affecting aluminum availability, storage costs, and prices.
After Goldman bought Metro, it accumulated massive aluminum holdings of its own, and in 2012, added about 300,000 metric tons of its own aluminum to the exit queue at its warehouses.”
“Between 2010 and 2013, Goldman built up its physical aluminum stockpile from less than $100 million in 2009, to more than $3 billion in aluminum in 2012. At one point in 2012, Goldman owned about 1.5 million metric tons of aluminum, worth $3.2 billion, more than 25% of annual North American aluminum consumption at the time…
The Metro system for transporting metal that was part of a merry-go-round deal produced some unusual metal movements.
For example, on October 2, 2013, several trucks were loaded with aluminum at a Metro warehouse on Lafayette Street in Mount Clemens, Michigan, destined for another Metro warehouse about twelve miles away. That same day, several trucks were loaded with aluminum at a third Metro warehouse in New Baltimore, Michigan, and shipped to the Lafayette Street warehouse. The next day, the Lafayette Street warehouse again shipped out several truckloads of aluminum only to be on the receiving end of metal shipments the day after that.
In short, over the space of two days, the Lafayette Street warehouse saw truckloads of virtually identical aluminum shipments depart, arrive, depart, and arrive again...
On another occasion, in November, 2013, Metro loaded aluminum out of one warehouse and moved it into another warehouse about 200 feet away across a parking lot.
Goldman told the Subcommittee that warehouse personnel didn’t know whether the metal was moved across the parking lot on the property to the second warehouse, or instead was driven around the block on public streets. In any event, multiple trucks trundled tons of aluminum from one warehouse location to the other just a few feet away...
On another three-day period in December 2013, pursuant to a merry-go-round deal, trucks carrying tons of aluminum transported that aluminum to and from the exact same warehouses in a circular pattern at odds with rational warehouse activity. The trucks loaded the aluminum from the first warehouse, unloaded it at the second, picked up different lots of aluminum from the second warehouse, and drove it to the first where it was unloaded.
Those trucks bearing similar loads of aluminum did not transport the metal for free, but imposed substantial costs on Metro to carry out the transactions.”
Wondering how this has affected the price of aluminum, click here.
* * *
By way of evidence of what happens when you can no longer rig markets...
Goldman Sachs produced $1 billion of revenue from its commodities unit and investments in commodity businesses in 2012, down from $3.4 billion in 2009, according to a Senate Permanent Subcommittee on Investigations report released yesterday on banks’ involvement in those markets.
Morgan Stanley’s commodity revenue fell for four straight years, from $3 billion in 2008 to $912 million in 2012, according to the report.
* * *
Live Feed:
Click image for live feed (if embed above is not working):
The Hearing involves:
PANEL ONE
CHRISTOPHER WIBBELMAN
President and Chief Executive Officer
Metro International Trade Services LLC
Allen Park, MI
JACQUES GABILLON
Head of the Global Commodities Principal Investments Group
Goldman Sachs & Co.
London, England
PANEL TWO
JORGE VAZQUEZ
Founder and Managing Director
Harbor Aluminum Intelligence Unit, LLC
Austin, TX
NICK MADDEN
Senior Vice President and Chief Supply Chain Officer
Novelis Inc.
Atlanta, GA
PANEL THREE
SIMON GREENSHIELDS
Global Co-Head of Commodities
Morgan Stanley
New York, NY
GREGORY A. AGRAN
Co-Head of Global Commodities Group
Goldman Sachs & Co.
New York, NY
JOHN ANDERSON
Co-Head of Global Commodities
JPMorgan Chase & Co.
New York, NY
»
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The thieves have their loot and now the Senate investigates the crime. Big deal. One last photo opportunity for retiring Senator Carl Levin, a do-nothing big talker.
That bank-owned government was one shitty deal.
No one will go to jail, or be severely punished. The insiders are always protected in a crony capitalist, aka fascist society.
I smell a $500,000 fine in somebody's future!
Fortunately we have paper precious metals to manipulate those prices. It would be very risky for Goldman to be driving trucks of gold and silver around city streets. The workers might get ideas.
nothing to see here, folks...just move along and go buy some fucking stocks, will ya???
Guess not. If there was, they would have homocided Wibbelman.
I am shocked, shocked that the Vampire Squid actually drinks the blood of its victims.
This is how the Mafia works. Good job Congress.
Not one peep about gold (and thus global interest rate) manipulation.
That is the central reason for the global bubble that we are in and, surprise, gold is not mentioned. And it won't be.
this is great because it shows exactly what is going on in gold and silver by proxy.
"the banks did indeed corner and rig the commodity market."
And what happened decades ago to the Hunt brothers when they were accused of trying to corner the silver market????? The same will not happen to the banksters.
All these corrupt bankers can join the zero bankers jailed by Eric “fast & Furious” Holda, the “Do-Nothing AG.”
cheers to the Tylers for the link
Goldman & NY FED = cancer
Needs to be cut out, but lacking proper tools, it would be ugly - too ugly for Treasury or DOJ, so the patient's life is certainly at risk.
So we watch. Tra-la-la-la'ing (more like Ra-ra-ra-rawr'ing) our way through another xmas embarrassment. Can't wait for the vids..
The same guys who helped BUILD this system now cry : we didn't know it was DAT BAD !
EXACTLY! If any congressdick is actually upset about this, it's because they didn't get their cut.
Congress: send some top-level bad guys to jail, fine their companies out of existence, then kill yourselves. KTHXBAI!
Did we just get Grubered?
Hope, Hope and Change!!!
As Bloomberg reports, the Senate panel said the firms have eroded the line separating banking from commercial activities to the detriment of consumers and the financial system.
So this is what actually happens when you allow banks and brokerage houses to merge and speculate with depositors money?.... Didn't we have a set of laws that separated the two several decades ago when the same thing happened a long time ago???
As sick as this may sound? This is almost becoming enjoyable to watch!!!!
Can't wait for the parade of perp walks...
Speaking of slow drips...
I'd rather tweeze my pubic hairs than watch this hearing.
pods
Well, who doesn't enjoy that?
who still has pubic hairs?
Judging by some of the urinals I have seen, too many.
The "high and tight" look gets more repeat business from the women folk.
pods
With two kids running circles around my house, I could sculpt mine into a scaled replica of the Birth of Venus and I'd still end up having to take matters into my own hands...
Still way, way better than watching this trash of course...
http://youtu.be/ZO3pUVbNSnA?t=1m12s
Classic
At one time we were guranteed a speedy trial for the benefit of the accused.
Today, we never get to a trial, also for the benefit of the accused.
Wait, wasn't that guy with the great blond hair supposed to do this effort?
We've been getting daily Gruberings on everything.
Oh by the way?....
No wonder Mr. President wants a moat around "our" House in Washington!!!!
See what happens when they lost the respect of the people ?
No Sturm und Drang .
The sand just quietly disappeared under their feet until , like Wiley Coyote , the pedal air .
You are about 3 times richer than you think .
See
https://www.academia.edu/9405720/The_Economics_of_Disrespect_Update_I
or
http://andreswhy.blogspot.com/2014/11/the-economics-of-disrespect-update...
But...but...but the commodities market is too big to be rigged. That's what I've been told all along from those pro-banking lobbyists blocking additional oversight on the options and OTC markets. They pay my local congressman enough so that he's happy, and if he's happy, I'm happy.
Derivatives from paper holdings and being oversubscribed.
Shhhh....the plebs will get wise. I mean, never could anything be rehypothecated fraudulently, especially in the ABS markets, particularly the MBS market...which is not why the Fed has been buying it off banks books to keep them solvent while also hiding the fraud of over oversubscription.
government investigaiton = political extorsion
notice how the roof caved in on jpm after they contributed more to repubs than dems....
gee but is great to be a gangsta... business as usual... what free market... what laws....
listen sukka, your job is to pledge allegience, volunteer, keep your nose to the grindstone, reproduce (and if you dont we import them / illegals), pay taxes and consume.... got it ??? any questions ??? good ...now back to work idiot...
Hey close those barn doors !!! (even though the horses are miles over the mountains.)
The horses all died in a radioactive mist.
Gold and silver moving from west to east.
Central banks hate them because they reveal their financial recklessness with massive printing.
That just means it's time for mo' bigger smoke and mirrors, along with even more blatant criminality by the ruling class.
Comparable to someone closing down a bar, coming in and turning on the lights, kicking everybody out. Lots of bitching but no consequences. Tomorrow night they just find another bar/scam.
Banks will claim, we're just niave Muppets.
Don't forget they will get bailed out for any loses....
What can go wrong?!!!!
When you have Carl Levin on it!!!! The guy who's State and largest city is under the worst bankruptcy proceedings in U.S. history!!!!
He'll get to the bottom of this, once and for all!
He's doing a good job so far. We'll see where it all goes, however.
He's doing a good job so far. We'll see where it all goes, however.
And history tells us that Nero did a superb job with those "box of matches" for Rome!
Yes of course... I understand arson is the biggest business these days in Detroit to go with that bankruptcy so much so, the fire departments are so under budget and over worked that they haven't seen a pay raise in more than a decade!
While Carl is at it why doesn't he do his taxpayers in Michigan the ultimate favor and while he's between holiday recess burn the U.S. Capitol and it's adjacent office buildings down to the ground and go AWOL permanently so that we can start over!
nice, informative deck on scribd... thanks ZH
http://www.lme.com/metals/non-ferrous/aluminium/
Mid west avg is the other pricing structure.
Fraud isn't an industrial accident.
How is this "news" ? Everyone already knows that the US markets are a criminal farce. That's why tradiong is moving to Shanghi, Singapore, Hong Kong ...
Sadly, the "regulators" in New York, Chicago, Lodon are in on the scam. All they can do now is try and FORCE people to trade in their crooked casinos.
Anyone who wants a square deal is going to have to go to Asia.
Title 18 RICO Violations.
Racketeering.
If DOJ & FBI Do Not Prosecute, then we have grounds for Prosecuting FBI for Treason, but also we can claim the Democratic "State of Justice" has ended and we no Longer live in a Democracy or Constitutional Democracy.
Off With Their Heads!!
This, of course, will be true of every single commodity they trade. The CFTC, the Fed, and the DOJ should hanmmer these people (not just the firms, but the individuals and their supevisors) -- and should have done that on their own years ago. Will that happen? When pigs fly.They're bank-owned, after all.
Title 18 RICO Violations.
Racketeering.
So I read that as "Like ENRON but with Aluminum (and no law enforcement actions)", did I get that right?
This is about Monopoly choking free market growth.
7000 series is used for aircraft.
http://asm.matweb.com/search/SpecificMaterial.asp?bassnum=MA7050T745
Who controls commodities.
That is all about, nothing else.
THIS IS A JOKE !
what will they discover next ? that the sky is blue
hang them all !
We saw this story earlier this year.
Now add this:
Rich hoard cash as wealth reaches record...
http://www.cnbc.com/id/102198213
Gov't bonds no longer safe?
“This expansion of our financial system into traditional areas of commerce has been accompanied by a host of anti-competitive activities: speculation in the oil and gas markets; inflated prices for aluminum and potentially copper and other metals; and energy manipulation.”
The politicians may make a good show of it, and talk harshly to their witnesses. And then take their money, and lick their hands. - Jesse
As an engineer, I feel obligated to point out the inefficiencies in this process by wasting fuel on the pointless activity of continuously rehandling several tons of aluminum
The human being in me recoils in horror that these dumb$hit activities allow them to make millions, if not billions, by controlling supply while rigging commodity markets.
Ford 2015 F 150 is made with aluminum this year. You would think aluminum would be in great demand. This appears as another middle man to drive the price up and delay delivery. Listening to the guests (bankers) is painful. These guys are trying to cover their ass with help from the Senators. Nothing will change nexy year in Congress. We are screwed.
Nice to see Sen. Levin at least demonstrates some knowledge on the subject. Nothing worse than a politician who starts 'I'm no expert so here's some questions from someone else.
Like the Portman guy - he was a fuckin' useless bank stooge to waste time.
anybody else's BS meter peg when that bitch interrupted?
CONgress inquires, in unison: WHERE'S MY CUT??!!
The only thing that will stop this breed of blood suckers is to tar and feather them. Oh yes, and confiscate all their money.
Prosecute the FBI. All criminal douchebags.
What is the mission of the FBI?
The mission of the FBI is to protect and defend the United States against terrorist and foreign intelligence threats, to uphold and enforce the criminal laws of the United States, and to provide leadership and criminal justice services to federal, state, municipal, and international agencies and partners. It performs these responsibilities in a way that is responsive to the needs of the public and faithful to the Constitution of the United States.
Wible wobble wibble wobble, this Wibbleman guy is as slimey as they come.
He cannot/will not answer a question straight. Then looks across to his Goldman Master to check if 'he dun good'.
This is so obvious to anyone watching these two are lying scumbags.
Sen Levin will be sorely missed.
Liar liar pants on fire. Cunt.
Well Charles Keating, how do you recommend we manage public opinion about this one, and prevent future disclosures of our criminal operations?
Even if the bankers don't get punished, this hearing helps erode the public trusts in banks.
The zerohedge audience's trust in banks may already be low, but most of the population is hopeful that the banks will figure out a way to save the economy. This shows, again, that the bankers are the enemy.
In the USA We have Military Republic, so we don't discuss what a Democracy really is. There is nothing in our Constitution or Declaration of Independence that approves of Foreign Military Entanglements or conquering other countries for Resources. And we don't have Referendums, so really can't vote on National Issues as a Democracy would.
Liberal democracy (Redirected from Constitutional democracy)
- is a form of government in which representative democracy operates under the principles of liberalism, i.e. protecting the rights of the individual, which are generally enshrined in law.
- multiple distinct political parties,
- a separation of powers into different branches of government,
- the rule of law in everyday life as part of an open society,
- and the equal protection of human rights, civil rights, civil liberties, and political freedoms for all persons.
- enshrined the social contract.
- a system of checks and balances between branches of government
- state of justice, In a Rechtsstaat, the power of the state is limited in order to protect citizens from the arbitrary exercise of authority
- federalism—also known as vertical separation of powers—in order to prevent abuse and increase public input by dividing governing powers between municipal, provincial and national governments
- "loyal opposition", where political competitors may disagree, but they must tolerate one another and acknowledge the legitimate and important roles that each play.
- Preconditions for Democracy:
Although they are not part of the system of government as such, a modicum of individual and economic freedoms, which result in the formation of a significant middle class and a broad and flourishing civil society, are often seen as pre-conditions for liberal democracy (Lipset 1959).
**Wikipedia helps a little, but article doesn't address Cultural Secrecy, Covert War, Covert Action to overthrow Other Democratically Elected Governments, and doesn't mention NSA or FBI Spying on Domestic Population, or spying on other Democracies***
**Clearly, USA is no longer a Democracy at all, And there are some pieces of Democracy not listed above**
Knock the Soviet Union (and rightly, on most counts) all you can, but they had one thing, like CHina today, that was spot on... speculators were put to death.
These corporations, as citizens, should meet the same fate.
Great article that also presents a valid argument as to why looters and rioters in Ferguson, MO should not be arested or prosecuted . . . because lack of enforcing the laws of the land should be afforded everyone equally. BUCKLE UP.