Goldman, JPMorgan and other securities firms are snapping up warehouse operators to take...

Goldman, JPMorgan and other securities firms are snapping up warehouse operators to take advantage of the big profit opportunities in holding metals. Warehousers collect a holding fee and can charge a premium on large corporate orders, but critics worry firms will exploit their trading knowledge.

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Comments (9)
  • tigersam
    , contributor
    Comments (1707) | Send Message
    GS and JPM will make money in any markets. These firrms have smart people working there.
    5 Jul 2011, 11:47 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (353) | Send Message
    >>"but critics worry firms will exploit their trading knowledge." <<


    Hasn't anyone learned anything? They WILL exploit their trading knowledge. That is in their nature.
    5 Jul 2011, 12:14 PM Reply Like
  • SirDigbyChickenCaesar
    , contributor
    Comments (44) | Send Message
    I'd say the main point of this move is to have more knowledge to exploit, not charging a holding fee. It has already been shown on BBC that the large banks instigated the recent rally in copper by creating artificial supply constraints while warehouses were full of copper.
    5 Jul 2011, 12:40 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
    "Hey stop skimming our Skim"


    from the movie "Casino"


    How appropriate.


    Does one need FDIC insurance such attempts at manipulating prices?


    TBTF & Too big to Jail.

    5 Jul 2011, 12:42 PM Reply Like
  • kmi
    , contributor
    Comments (4584) | Send Message
    Banks should be banks, any commercial activity outside of banking is both risky and completely and unfairly positions the banks favorably as they have significantly larger access to capital than any other entity.
    5 Jul 2011, 05:17 PM Reply Like
  • Joe Eifrid
    , contributor
    Comments (353) | Send Message
    And if they make a bad bet the govt steps in and has us taxpayers bail them out.
    5 Jul 2011, 06:46 PM Reply Like
    , contributor
    Comments (10787) | Send Message
    This is a "BS" conclusion. GS and JPM are not about controlling warehouses to garner fees. They want to control the physical inventories of metals to be able to do what they want with the paper representations.


    I have always said the PM ETF's were simply a way to congregate inventories into relatively few locations. It makes control of physical more possible. It also makes "confiscation" easier.
    6 Jul 2011, 12:06 PM Reply Like
  • Joe Eifrid
    , contributor
    Comments (353) | Send Message
    1994...Although the peso’s collapse was supposedly unanticipated, over 4 billion U.S. dollars suddenly and mysteriously left Mexico in the 20 days before it occurred. Six months later, this money had twice the Mexican purchasing power it had earlier. Later commentators maintained that lead investors with inside information precipitated the stampede out of the peso.8 The suspicion was that these investors were the same parties
    who profi ted from the Mexican bailout that followed. When Mexico’s
    banks ran out of dollars to pay off its creditors (which were largely U.S.banks), the U.S. government stepped in with U.S. tax dollars. The Mexican bailout was engineered by Robert Rubin, who headed the investment bank Goldman Sachs before he became U.S. Treasury Secretary. Goldman Sachs was then heavily invested in short-term dollar-denominated Mexican bonds. The bailout was arranged the day of Rubin’s appointment. The money provided by U.S. taxpayers did not go to Mexico but went straight into the vaults of Goldman Sachs, Morgan Stanley, and other big American lenders whose risky loans were on the line.


    The late Jude Wanniski was a conservative economist who was at
    one time a Wall Street Journal editor and adviser to President Reagan. He cynically observed of this banker coup:


    "There was a big party at Morgan Stanley after the Mexican peso
    devaluation, people from all over Wall Street came, they drank
    champagne and smoked cigars and congratulated themselves on
    how they pulled it off and they made a fortune. These people are
    pirates, international pirates."


    The loot was more than just the profits of gamblers who had bet the
    right way. The pirates actually got control of Mexico’s banks. NAFTA
    rules had already opened the nationalized Mexican banking system to a number of U.S. banks, with Mexican licenses being granted to 18 big foreign banks and 16 brokers including Goldman Sachs. But these banks could bring in no more than 20 percent of the system’s total capital, limiting their market share in loans and securities holdings.11 By 2004, this limitation had been removed. All but one of Mexico’s major banks had been sold to foreign banks, which gained total access to the formerly closed Mexican banking market.


    From 'Web of Debt' by Ellen Brown
    6 Jul 2011, 08:10 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
    Come on. I thought that's what government backed Banks are supposed to do with their fractional reserve, retail deposits?

    6 Jul 2011, 08:30 PM Reply Like
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