Elizabeth Warren wants to stop Goldman Sachs’ soda can scheme
Elizabeth Warren wants to crack down on Goldman Sach’s exploitation of loose market regulations to inflate the price of aluminum, a set-up that costs consumers around $5 billion a year.
“I share the concern of many of my colleagues about asset managers at huge Wall Street banks exercising control of key parts of America’s infrastructure,” Warren said in a Senate Banking Committee hearing on the subject, Business Insider reports.
The New York Times reported over the weekend that Wall Street firms have been buying up infrastructure in the commodities market, and making bank off of it:
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.
In the case of aluminum, Goldman bought Metro International Trade Services,one of the country’s biggest storers of the metal. More than a quarter of the supply of aluminum available on the market is kept in the company’s Detroit-area warehouses.
Goldman purposefully increases the amount of time the metal is stored, according to the Times, which eventually increases the price of an aluminum can, for instance, by a a tenth of a cent. This amounts to millions more dollars per year that Goldman makes off of the inflated price.
More:
http://www.salon.com/2013/07/24/elizabeth_warren_wants_to_stop_goldman_sachs_soda_can_scheme/
= new reply since forum marked as read
