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A Shuffle of Aluminum, but to Banks, Pure Gold

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Guest hellsten

So this is how Goldman Sachs, the epitome of capitalism, makes the system more efficient:


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.


Perhaps Ayn Rand, GS, Eddie Lampert and others would blame the regulators and the government for the 20-fold growth?

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Banks' Role in Commodity Business Faces Scrutiny


Senators Are Told That Banks' Practices Are Boosting Materials Costs.





Banks' ownership of oil pipelines, metals warehouses and other commodity-related assets poses a risk to the financial system while imposing extra costs on companies and consumers, lawmakers and witnesses said at a Senate hearing Tuesday.


The criticism comes as the Federal Reserve reconsiders its decades-old decision allowing major banks to start trading, storing and transporting raw materials. Goldman Sachs Group Inc., GS -0.16%J.P. Morgan Chase JPM +0.19%& Co. and Morgan Stanley, MS +0.83%three of the largest financial entrants into physical commodities markets, held $35.2 billion in physical commodities at the end of last year, according to Fed data.



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