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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.


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Results for gs
Jason Olive
29 Dec 14 02:07:21
RT @SeekingAlpha: One Thing Apple Should Do To Preserve Its Market Position http://t.co/M4XsRLIyKG $GOOG #GOOGLE $GS $MSFT $GOOGL $AAPL
John Michael
29 Dec 14 02:01:28
RT @SeekingAlpha: One Thing Apple Should Do To Preserve Its Market Position http://t.co/M4XsRLIyKG $GOOG #GOOGLE $GS $MSFT $GOOGL $AAPL
Seeking Alpha
29 Dec 14 01:57:35
One Thing Apple Should Do To Preserve Its Market Position http://t.co/M4XsRLIyKG $GOOG #GOOGLE $GS $MSFT $GOOGL $AAPL
Noak Sten 鮟鱇 ಠ_ಠ
29 Dec 14 01:26:00
@GoldmanSachs Bring down $GS!!! SHIT SPAMMER!!! http://t.co/IlzkxuuzLD
ramona2772/aiubis
29 Dec 14 00:33:51
RT @GoldmanSachs: Top $GS economists from around the globe share their #economic outlooks for 2015. Watch the complete series: http://t.co/…
Stockaholics
29 Dec 14 00:27:42
Our Penny Stock Pick On $RGMI Is Up 271.62% In 4 Days! Get Our Next Pick Early: http://t.co/5aBIGeMhfd $GS $ZION $ISRA
Denis Gouaux
29 Dec 14 00:12:32
RT @GoldmanSachs: Top $GS economists from around the globe share their #economic outlooks for 2015. Watch the complete series: http://t.co/…
PolgarStocks
28 Dec 14 23:56:36
$EWC Stock Forum Updated Monday, December 29, 2014 02:07:27 AM $TMF $GS $BAA $CYNO http://t.co/yNZpfUnHoS
Eternity101
28 Dec 14 23:35:31
I N D I C A T O R S $BANK $RTH $VXO $VIX $TNX $TLT $SOX $JJC $GLD $GS $TRIN $TICK $OEX $DJU $FXY $BPSPX https://t.co/0K6egVBeMZ
Langan Stocks
28 Dec 14 22:54:12
$XLK Short Sales Updated Monday, December 29, 2014 01:03:27 AM $MCD $SYNC $GS $JNK http://t.co/suLl1dLcKR
Pappy#Realer No#
28 Dec 14 22:28:54
RT @GoldmanSachs: #TBT: Street view of the original $GS office, founded in 1869 as a commercial paper dealer at 30 Pine Street. #GS145 http…
IH News Desk
28 Dec 14 22:11:41
$SPLS Stock Forum Updated Monday, December 29, 2014 00:11:32 AM $LQMT $GS $IYT $CYNO http://t.co/LhB8KH7fT1
César Cambrón
28 Dec 14 21:47:53
RT @CMDerivados: Call largo en $GS en $195 esperando llegar a techo de $197.5, profit esperado de $250 por contrato http://t.co/VWzuale6cU
TalkMarkets
28 Dec 14 20:24:25
Russian Roulette: #Taxpayers Could Be On The Hook For Trillions In #Oil #Derivatives $BAC $C $JPM $MS $GS $WFC http://t.co/pEwUrlDblf
Juan Jose Llovera
28 Dec 14 20:19:47
Tomorrows watchlist: $GS $AAPL $LNKD.
IH News Desk
28 Dec 14 20:11:15
$USO Stock Message Board Updated Sunday, December 28, 2014 10:11:28 PM $LFC $GS $AFSI $WMT http://t.co/CtwaGMpPEY
Stockaholics
28 Dec 14 20:02:40
Our Penny Stock Pick On $RGMI Is Up 271.62% In 4 Days! Get Our Next Pick Early: http://t.co/5aBIGeMhfd $GS $ZION $ISRA
PolgarStocks
28 Dec 14 18:53:12
$C Company Info Updated Sunday, December 28, 2014 9:07:28 PM $GS $XLP $HAR $LFC http://t.co/4bAFyKhuhW
PolgarStocks
28 Dec 14 18:53:05
$BAC Stock Price Updated Sunday, December 28, 2014 9:07:28 PM $MCD $PG $GS $IWM http://t.co/OlCyB8RSLn
PolgarStocks
28 Dec 14 17:52:13
$EWC Opinions Updated Sunday, December 28, 2014 8:07:29 PM $RCPI $GS $AEM $NKE http://t.co/EYzsdX7I8j
PolgarStocks
28 Dec 14 15:50:14
$AJAC Financials Updated Sunday, December 28, 2014 6:07:15 PM $AYI $GS $DIS $EWZ http://t.co/Wnuk4wnikq
Bilo Selhi
28 Dec 14 15:17:04
If you were subscribed to http://t.co/T9zutL79nE, you would have been alerted to: $FNMA +16% http://t.co/zsblEqiqXM $MCD $FOXA $GS $UTX
Langan Stocks
28 Dec 14 14:47:17
$CKEC Filings Updated Sunday, December 28, 2014 5:03:19 PM $EFA $QLD $HJOE $GS http://t.co/3yaq6BVyhA
TalkMarkets Recap
28 Dec 14 14:23:44
Russian Roulette: #Taxpayers Could Be On The Hook For Trillions In #Oil #Derivatives $BAC $C $JPM $MS $GS $WFC http://t.co/A8okXKSSC9
Da GoodFella
28 Dec 14 14:16:22
"@GoldmanSachs: $GS Andrew Tilton on #Asia’s window of opportunity for structural reform in 2015: http://t.co/QeTgpmTq7m
Eternity101
28 Dec 14 13:07:56
I N D I C A T O R S $BANK $RTH $VXO $VIX $TNX $TLT $SOX $JJC $GLD $GS $TRIN $TICK $OEX $DJU $FXY $BPSPX https://t.co/I3XMgQw0yv
Rosner Stocks
28 Dec 14 11:39:24
$T Recent News Updated Sunday, December 28, 2014 1:59:23 PM $AAPL $TZA $GS $SMH http://t.co/UJiebqZJri
NASDAQ
28 Dec 14 10:43:07
$GS - Japan's M&A Rankings Topped by a Two-Nation Hybrid http://t.co/vPxUnQNC53
Investors Hangout
28 Dec 14 10:29:04
chartguy89: GS Stock Chart $GS $CALA $MXI $EWU http://t.co/5oZHeMoPG4
chartguy89
28 Dec 14 10:20:50
GS Stock Chart $GS $CALA $MXI $EWU http://t.co/19eGefqZ6t http://t.co/qOhTAot4F9
Stockaholics
28 Dec 14 10:05:21
Our Penny Stock Pick On $RGMI Is Up 271.62% In 4 Days! Get Our Next Pick Early: http://t.co/5aBIGeMhfd $GS $ZION $ISRA
Investors Hangout
28 Dec 14 09:58:41
chartguy89: SANM Stock Chart $SANM $ILMN $AAP $GS http://t.co/ir4h4fPmrU
Investors Hangout
28 Dec 14 09:58:41
chartguy89: SANM Stock Chart $SANM $ILMN $AAP $GS http://t.co/HoYFol3UNY
Ron DeLegge
28 Dec 14 09:55:03
(Audio) A Real Life Story about a 122 yr old investor + Before you buy ANY stocks do this FIRST http://t.co/njc8GAP2Yc $TSLA $SPY $LNKD $GS
chartguy89
28 Dec 14 09:48:54
SANM Stock Chart $SANM $ILMN $AAP $GS http://t.co/3UX1jBvmZ1 http://t.co/3Jizs9Q37h
PolgarStocks
28 Dec 14 09:44:05
$PBR Stock Forum Updated Sunday, December 28, 2014 12:07:15 PM $XLK $TQQQ $GS $INCC http://t.co/4ziDtqgYDE
PolgarStocks
28 Dec 14 09:44:04
$BBRY Reviews Updated Sunday, December 28, 2014 12:07:15 PM $GS $ROX $GPI $GULTU http://t.co/L8Lm79vUcH
the fernando
28 Dec 14 09:44:00
$GS Japan announced 47 billion dollar stimulus. Should help
lookn4wins
28 Dec 14 09:24:47
$ABTL Chart $ABTL Most recent stock chart and technical analysis. $GS $TRVLX $ATRS $VXX $LULU $MYEC http://sto http://t.co/Agh2PPeo6z
OTPicks.com
28 Dec 14 09:13:35
http://t.co/NYsxQOU64w danrocks: $BIDU Showing on my streamers $HACK $CLF $GS $XLF: danrocks http://t.co/9afysuquf0 http://t.co/NYsxQOU64w
OTPicks.com
28 Dec 14 09:13:33
http://t.co/QkCFZ8YF3c danrocks: $BIDU Showing on my streamers $HACK $CLF $GS $XLF: danrocks http://t.co/uRbhmLAZMo http://t.co/QkCFZ8YF3c
Investors Hangout
28 Dec 14 09:05:13
danrocks: $BIDU Showing on my streamers $HACK $CLF $GS $XLF http://t.co/N9d9Hulqee
Investors Hangout
28 Dec 14 09:05:13
danrocks: $BIDU Showing on my streamers $HACK $CLF $GS $XLF http://t.co/4rk25CfLlg
Investors Hangout
28 Dec 14 09:05:12
danrocks: $FXC Picking Up MOMO $DIS $GS $AAL $HACK $GG http://t.co/bVt1KqOz13
Investors Hangout
28 Dec 14 09:05:12
danrocks: $FXC Picking Up MOMO $DIS $GS $AAL $HACK $GG http://t.co/EdLCiSMplq
Extreme Stocks
28 Dec 14 09:04:40
danrocks: $BIDU Showing on my streamers $HACK $CLF $GS $XLF http://t.co/hiJ4y8HHAY
Etos Etana
28 Dec 14 09:01:01
RT @IHPosts: Emylers: $GS Up to date company activities and other http://t.co/oF0QB5RYdu
Investors Hangout
28 Dec 14 08:57:39
Emylers: $GS Up to date company activities and other http://t.co/oF0QB5RYdu
Investors Hangout
28 Dec 14 08:57:39
Emylers: $GS Up to date company activities and other http://t.co/uZtR6NAcFs
OTPicks.com
28 Dec 14 08:53:20
http://t.co/NYsxQOU64w danrocks: $FXC Picking Up MOMO $DIS $GS $AAL $HACK $GG: danrocks http://t.co/Zk5m9xeAJJ http://t.co/NYsxQOU64w
				
				
  +Follow August 1, 2013 6:46AM
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