"JP Morgan, Blackrock and Goldman have all been given approval by the SEC to buy a large amount of copper available on the market and stockpile it" Interesting...
here is original article: http://www.nytimes.com/2013/07/21/b...um-but-to-banks-pure-gold.html?pagewanted=all I would not call this scheme bizzare. hopefully goldman pays a high penalty for moving the metal between its own warehouses. it never will happen. it remind me of bank tellers etc. stealing a penny of many bank account transactions.. the bank employees go to jail for a long time while goldman will likely convince the court, if it gets there, that it is all legal. goldman will never be the poster child for capitalism.
Aluminum storage facilities are not allowed to mindlessly sit on aluminum â -------------- This is very interesting.. Sometime ago I read an article that it was against the law for junkyards to stock pile metal. I thought that is absurb, it's your product, you bought it and the gov't is telling you, you cannot store or stock pile it. I suppose junk yards don't have the luxury of a GS warehouse.
http://www.kitcometals.com/charts/aluminum_historical_large.html#5years The warehouse cost is astronomical (12%), but the spot price is down and the warehouse stock is up, and the futures curve is in contango. So basically the metal is in short term oversupply, sellers are sitting on supply (waiting for price to rise). Doesn't sound that nefarious. The phantom warehouse moves are probably on behalf of customers who don't want to sell at the spot price.
Instead of moving the physical aluminum from A to B and back, wouldn't it be cheaper and a whole lot easier for Wearhouse A to buy Warehouse B and warehouse B to buy warehouse A each day with the respective proceeds, and then just change the sign outside? Goldman could hire Wendy Gramm as a consultant to figure out how to do the transaction. If she can't figure it out, I'm sure one of her fellow ex-ENRON board members would know how.