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Goldman Sachs Offers to Release Aluminum Amid Accusations of Stockpiling

  +Follow August 1, 2013 6:46AM
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Facing worldwide shortages, Goldman Sachs Group Inc (GS) has indicated that they might run loose some of their massive stores of aluminum. The financial giant has come under intense scrutiny following reports that they were deliberately mismanaging aluminum shipping to cause worldwide shortages and ultimately profit off of a manipulation of the commodities market.

The New York Time alleged that the bank choreographed an “industrial dance” that artificially raised the price of the metal, thus gouging consumers out of billions of dollars. Aluminum is used widely the world over to make soda, juice, and beer cans. The United States alone goes through 90 billion cans of aluminum a year.

Analyst Tim Wiener of beer manufacturer MillerCoors LLC testified to the U.S. Senate that increased warehousing times for aluminum had inflated aluminum prices $3 billion in 2012.

Banks involvement in the commodities market has long been historically prohibited by American regulation. The first indications banks would be able to get into commodity trading began with the gradual dissolution of the Glass-Steagall Act in 1999, which prohibited commercial and investment banks from engaging in the same activities.  In 2003 the Federal Reserve officially began allowing investment banks to trade physical commodities.

If Goldman has been manipulating the commodities market (and evidence is mounting that they did create artificial aluminum scarcity to drive up prices) it raise the question of whether investment banks should be allowed in the commodity market at all. Since the investment banks are now allowed to own warehouses and shipping ventures, they are made privy to knowledge concerning commodity storage and shipping that oftentimes would be considered insider trading. But simultaneously owning commodites and trading their futures is entirely legal, thanks to the 2003 decision.

But possibly not for long.  A proposed new regulatory bill, dubbed the “21st Century Glass-Steagall,” currently enjoys bi-partisan support. And on July 20 the Federal Reserve elected to review that decision, which could force the banks out entirely.

Other investment houses are voluntarily divesting from physical commodities trading, as threat of legal action increases. JP Morgan Chase & Co. (JPM) is fleeing the commodities market altogether, and is putting their entire trading desk up for sale. On July 29, JP Morgan was forced to pay out a settlement of $410 million for engaging in price manipulation of the power market.

But for the time being, Goldman, while releasing a large chunk of their stored metals, have no intention of leaving commodities altogether. Goldman CEO Gary D. Cohn has already said, “Commodity hedging is a core competency and one of the most important things we do in the firm, and our clients really need us to be in that business. We are staying in.”

Goldman’s stock was up .99 percent to close the day at $164.03. The stock is up 23.37 percent on the year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for gs
Amar Randhawa
28 Jul 15 06:20:44
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McCormicK©
28 Jul 15 06:17:23
RT @NorthmanTrader: Something for bulls, something for bears: http://t.co/oyxLxqVfOl $GS $SPX $DJIA #signals http://t.co/2Lt0r2N1D5
Northy
28 Jul 15 06:06:26
Something for bulls, something for bears: http://t.co/oyxLxqVfOl $GS $SPX $DJIA #signals http://t.co/2Lt0r2N1D5
Fabrique LXXII
28 Jul 15 06:03:59
RT @GoldmanSachs: ICYMI $GS #ImpInv helps rebuild #NYC neighborhood, turning vacant land into new housing, schools & hub for #smallbiz http…
ETFguide.com
28 Jul 15 06:02:13
(AUDIO) Here's how one wealthy family got hosed on investment fees...http://t.co/0p0e7KUoQ0 $MS $LPLA $GS $IVV $XLF
Ron DeLegge
28 Jul 15 06:02:11
(AUDIO) Here's how one wealthy family got hosed on investment fees...http://t.co/GU5IQHe8b3 $MS $LPLA $GS $IVV $XLF
Portfolio Talk
28 Jul 15 06:02:04
(AUDIO) Here's how one wealthy family got hosed on investment fees...http://t.co/gV24wt8X3z $MS $LPLA $GS $IVV $XLF
TJ Snyder
28 Jul 15 05:53:15
Very cool - Goldman Sachs to invest in Female Entrepreneurs in Emerging Markets http://t.co/UNBuJR3Eqd .@GS10KWOMEN $GS
Stock Forums
28 Jul 15 05:48:07
USO United States Oil Fund, LP % Change http://t.co/SUPiaJL0RY $USO $EEM $ABBV $GS #USO #tradeideas #nasdaq
Rosner Stocks
28 Jul 15 05:48:04
VEA Vanguard Europe Pacific ETF Investor Opinions http://t.co/w34JxAnntO $VEA $GS $GILD $TVIX #VEA #share #finance
Stock_Tracker
28 Jul 15 05:45:07
STOY Spiral Toys Inc. News http://t.co/P7LRuTy5aR $STOY $VLTC $GS $GM #STOY #pennystocks #invest
Opeoluwa | Open NASS
28 Jul 15 05:43:44
RT @GoldmanSachs: How a 1-yr job became a career for $GS' Stephanie Hui: @FinanceAsia's Top #Women in #Finance http://t.co/run1diS9jh http:…
BreakingStocksNews
28 Jul 15 05:42:04
$GLRE $GS $LEHMQ: Einhorn Punished by Gold as Greenlight Re Tumbles 16% This Year: http://t.co/65BpcSflxz
StockNewsWires
28 Jul 15 05:42:03
$GS: Copper Rebounds From Six-Year Low as Industrial Metals Advance: http://t.co/1i6ZXM0zUN
XII
28 Jul 15 05:39:06
RT @GoldmanSachs: How a 1-yr job became a career for $GS' Stephanie Hui: @FinanceAsia's Top #Women in #Finance http://t.co/run1diS9jh http:…
Stock_Tracker
28 Jul 15 05:37:35
GS Goldman Sachs Group, Inc. Short Sales http://t.co/fMy1uYWwVy $GS $HZNP $CVS $POZN #GS #pennystocks #pennystocks
Stock Forums
28 Jul 15 05:36:34
FXE Currency Shares Euro Trust Filings http://t.co/WX16UgGswA $FXE $GS $HAIN $FEYE #FXE #pennystocks #stockmarket
Buck
28 Jul 15 05:32:16
$GS $V $ERX $XIV $F Tuesday Morning Market Video – $TWTR $FB $SPY $IWM $QQQ $VIX http://t.co/gjFDgmbcw2
GoldmanSachs Careers
28 Jul 15 05:31:09
RT @GoldmanSachs: How a 1-yr job became a career for $GS' Stephanie Hui: @FinanceAsia's Top #Women in #Finance http://t.co/run1diS9jh http:…
Smith's Gradings
28 Jul 15 05:30:08
RT @GoldmanSachs: ICYMI $GS #ImpInv helps rebuild #NYC neighborhood, turning vacant land into new housing, schools & hub for #smallbiz http…
bored2tears
28 Jul 15 05:28:52
Goldman in Ventureland: How Goldman Sachs became a #tech-investing powerhouse. http://t.co/mWGNtOg37G $GS #LongReads #VC
SocialImpactFinance
28 Jul 15 05:28:37
RT @GoldmanSachs: ICYMI $GS #ImpInv helps rebuild #NYC neighborhood, turning vacant land into new housing, schools & hub for #smallbiz http…
B G KRISHNA
28 Jul 15 05:27:36
RT @GoldmanSachs: ICYMI $GS #ImpInv helps rebuild #NYC neighborhood, turning vacant land into new housing, schools & hub for #smallbiz http…
Sam Alanbari
28 Jul 15 05:25:19
RT @GoldmanSachs: ICYMI $GS #ImpInv helps rebuild #NYC neighborhood, turning vacant land into new housing, schools & hub for #smallbiz http…
Goldman Sachs
28 Jul 15 05:24:32
ICYMI $GS #ImpInv helps rebuild #NYC neighborhood, turning vacant land into new housing, schools & hub for #smallbiz http://t.co/aiEZkuCJuP
My Financial Wisdom
28 Jul 15 05:18:58
Dividend Investing http://t.co/8TGkCC0rZm #DividendInvesting #StockMarket $AXP $GS $MCO $WMT $USB $WFC $PG $IBM $KO $XOM #Investment #money
Luke McLachlan
28 Jul 15 05:10:28
@JF991 I think they also find it hilarius $JPM $GS
John L. Bair
28 Jul 15 04:50:22
#Faucette #Simona $BBRY must've leapfrogged $GS $CS $MS $MOBL #1 competitor of $BB.CA BlackBerry #1 Gold Standard
jim50
28 Jul 15 04:40:05
IFCR Integrated Freight Corp. Investor Opinions http://t.co/5Ev9ktx4L1 $IFCR $DBC $GS $BP.L #IFCR #investing #tradeideas
leahanne
28 Jul 15 04:39:04
GS Goldman Sachs Group, Inc. Ask http://t.co/FfvQ8IVrZT $GS $XRX $RGSE $KMI #GS #stocks #pennystocks
Hector Davis
28 Jul 15 04:34:22
"How $GS Became a Tech-Investing Powerhouse" http://t.co/5XG5GDR5m0
Buck
28 Jul 15 04:31:20
$GS $V $ERX $XIV $F Tuesday Morning Reads – 7/27/15 - Update from Option Millionaires - Stock Options Chatroom St... http://t.co/l8XRRVImJn
Fabrizio Bruni
28 Jul 15 04:13:50
RT @Mick_Peel: CARTEL $GS Goldman CEO Blankfein casually drops@ 3:08 "4 out of those 6 buyers r our clients" https://t.co/SvmbvOrMiX http:/…
Lewis Worrow
28 Jul 15 04:04:41
The inside story of how Goldman Sachs became a tech-investing powerhouse. Via @business $GS - http://t.co/7fyiJQxSKs http://t.co/Ttsw6UEyfg
Mark Plackett
28 Jul 15 04:00:05
RT @Mick_Peel: CARTEL $GS Goldman CEO Blankfein casually drops@ 3:08 "4 out of those 6 buyers r our clients" https://t.co/SvmbvOrMiX http:/…
Mick Peel
28 Jul 15 03:57:07
CARTEL $GS Goldman CEO Blankfein casually drops@ 3:08 "4 out of those 6 buyers r our clients" https://t.co/SvmbvOrMiX http://t.co/KmIAnhoZCf
IH News Desk
28 Jul 15 03:51:11
XLK Technology Select Sector SPDR Bid http://t.co/wMA2xdFtMx $XLK $UPRO $GS $ILMN #XLK #investing #stocks
Stock_Tracker
28 Jul 15 03:49:40
VXX iPath S&P 500 VIX Short-Term Futures ETN Stock Message Board http://t.co/hJadsnuha7 $VXX $WMIH $GS $XLV #VXX #pennystocks…
leahanne
28 Jul 15 03:48:34
UNH Unitedhealth Group, Inc. Ex-Div Date http://t.co/mD2NhP8Hau $UNH $DIS $GS $SBUX #UNH #stocks #stock
danrocks
28 Jul 15 03:48:20
TGT Target Corp. Last Price http://t.co/UciWVvYhAR $TGT $GPRO $GS $JNJ #TGT #share #investing
Stock Forums
28 Jul 15 03:48:14
SPXS Direxion Daily S&P 500 Bear 3X Shares Dividend http://t.co/U4MdWk1t9s $SPXS $AKAM $GS $XLE #SPXS #investing #share
Lucky Jimmy
28 Jul 15 03:47:28
RLGY Realogy Holdings Corp. 52Wk High http://t.co/jSzDYSS9rc $RLGY $GSK $ERY $GS #RLGY #stockmarket #share
DennyT
28 Jul 15 03:47:06
SHY iShares Barclays 1-3 Year Treasury Bond Fund 52Wk Low http://t.co/hKTrsZsjDm $SHY $GDXJ $GS $CSCO #SHY #invest #invest
Investors Hangout
28 Jul 15 03:46:37
RGLD Royal Gold, Inc. Yield http://t.co/d2gfIZZgLh $RGLD $GS $AEM $XLP #RGLD #stockmarket #pennystocks
Emylers
28 Jul 15 03:45:35
PMCB PharmaCyte Biotech, Inc. E.P.S. http://t.co/wRPIwjbYGI $PMCB $GS $FEYE $BECN #PMCB #stocks #investing
Jake13
28 Jul 15 03:43:09
LPTN Lpath Inc. Dividend http://t.co/AKQOCLQXkj $LPTN $GS $IWM $CAF #LPTN #stockmarket #invest
Lucky Jimmy
28 Jul 15 03:42:36
LMT Lockheed Martin Corp. Stock Message Board http://t.co/LqNhj6lyMj $LMT $EOG $GS $SPXL #LMT #finance #finance
lookn4wins
28 Jul 15 03:42:06
JNUG Direxion Daily Junior Gold Miners Index Bull 3X Shares Current Price http://t.co/Yq8DOJSwJd $JNUG $ATHX $LEA $GS #JNUG #stocks…
Rosner Stocks
28 Jul 15 03:41:06
IBM International Business Machines Ask Size http://t.co/78sluWc5Jc $IBM $GS $XLB $ATRS #IBM #investing #share
PolgarStocks
28 Jul 15 03:40:39
GS Goldman Sachs Group, Inc. Filings http://t.co/r62zqWdyS8 $GS $HZNP $MBLY $AKAM #GS #pennystocks #invest
				
				
  +Follow August 1, 2013 6:46AM
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