Banks Inflate Prices of Commodities

Tuesday, July 23, 2013

Aluminum, copper, bronze and brass prodcuts. (Taurus/Shutterstock)

Warehouses full of aluminum are moved around and around within the city of Detroit several times a day. And they belong to Goldman Sachs.

You think you've heard all there is to know about big banks manipulating consumers and markets to make a buck? You might be surprised.

Big banks have their hands in commodity markets, but not just in futures.

Goldman Sachs and Morgan Stanley, among other big banks, have been buying up companies that store and deliver commodities. The banks turn a massive profit, and it costs consumers billions of dollars.

Everyday in Detroit, tons of aluminum is moved from one warehouse, to another—all to exploit pricing regulations that allow banks to raise the cost of aluminum by tenths of a penny, adding up to billions of dollars.

Saule Omarova, a professor of law at the University of North Carolina, joins The Takeaway to discuss how this works and what kind of loopholes these banks are exploiting. 

Stay up to date with The Takeawaybecome a Facebook fan & follow us on Twitter!

Guests:

Saule Omarova

Produced by:

Tyler Adams

Editors:

T.J. Raphael

Leave a Comment

Register for your own account so you can vote on comments, save your favorites, and more. Learn more.
Please stay on topic, be civil, and be brief.
Email addresses are never displayed, but they are required to confirm your comments. Names are displayed with all comments. We reserve the right to edit any comments posted on this site. Please read the Comment Guidelines before posting. By leaving a comment, you agree to New York Public Radio's Privacy Policy and Terms Of Use.