Why on earth does Goldman Sachs own a coal mine in Colombia?

[Judi Lynn]

Monday, Jul 22, 2013 04:18 PM CDT
Why on earth does Goldman Sachs own a coal mine in Colombia?

Big banks are increasingly operating their own commercial businesses. It's high time the Fed reigns them in


This piece originally appeared in Quartz.

In 1913, Congress determined that a cabal of Wall Street bankers had captured control over the US economy. Having bought up large shares of railroads, utilities, and manufacturers, these titans of finance had acquired the power to pick whether a business thrived or failed, and could effectively direct the nation’s commerce. “t is fraught with peril to the welfare of the country,” wrote the Pujo Committee, the investigating body.

In the century since, banks have mostly been prohibited from direct involvement in non-banking activities—transporting and storing goods, for example, or running commercial businesses. But today, a handful of banks are back in the game of real stuff and services. Goldman Sachs, for example, owns a coal mine in Colombia and a giant metals warehouse in Detroit. Morgan Stanley owns and operates electric power plants outside Reno and delivers cargoes of liquefied natural gas to Argentina.

This fall, the Federal Reserve will decide whether to allow these two banks to continue owning and operating these businesses. Experts say that if Goldman Sachs and Morgan Stanley get their way, the result could vastly expand the reach and influence of the entire banking industry—even as lawmakers hustle for ways to rein in these same giants.

The banks stand to gain the most rights in markets for essential commodities, like oil, gas, metals, and electricity. Over the last decade, the Fed has allowed a handful of commercial banks to directly enter these industries, largely through circuitous back road legal processes. Its decision in this instance could open a highway for everyone.

More:
http://www.salon.com/2013/07/22/goldman_sachs_has_no_business_partner/

[WovenGems]

1. Contra's

Wanted a hidey hole and Sach's needed a tax write off. A match made in rightwing heaven.

[matthews]

2. It had a free tentacle?

His July 2009 Rolling Stone article "The Great American Bubble Machine" described Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money".[1][11]

1)^ a b Salmon, Felix (DEC/JAN, 2011). "Giant Sucking Sound". Book Forum

2)^ Taibbi, Matt (July 13, 2009). "The Great American Bubble Machine". Rolling Stone (1082-1083).

Matt Taibbi
http://en.wikipedia.org/wiki/Matt_Taibbi

[Anymouse]

3. For the same reason banks own aluminum storage in Detroit

http://uk.reuters.com/article/2013/07/23/millercoors-lme-testimony-idUKL1N0FS1GL20130723

Profit. MillerCoors, Coca Cola, and numerous other corporations are urging the Fed to reverse its 2003 decision to allow banks to enter commodities markets.

Banks were prohibited from doing this years ago when anti-trust regulators determined they were manipulating the national economy.

MillerCoors, Boeing, Coca Cola, and other large manufacturers that use aluminum charge that large banks have swept up aluminum ingot storage facilities (using FDIC backed deposit accounts) and slow-walk delivery orders to collect on additional rental fees, costing them (and consumers) billions in fees a year.

Coors also notes that the ingredients for its beer (hops, barley,&c) they can accurately predict for delivery, but is hopelessly lost on aluminum deliveries.

See also Bloomberg, The Week, and Huffington Post on why this is so profitable for large banks (at other companies' and our expense).

Also this post right here at good ol' Democratic Underground.

+1 for your noticing this. It is not well-known and should be brought to people's attention why their beer and soda prices are going up. If you get enough beer drinkers mad about this, perhaps something will be done.

[zeos3]

5. Thanks for posting this. n/t

[dmr]

4. K&R

[zeos3]

6. Congressman Grayson is on to them.

http://www.democraticunderground.com/10023316048


Specifically, Congressman Grayson wrote – and Congressmen Conyers, Ellison and Grijalva co-signed – a letter to the Federal Reserve which, in the words of a congressional aide:


Ask[ed] why large banks are engaged in a host of commercial activities, including power production, management of ports, oil drilling and distribution, and uranium mining. These activities have nothing to do with the business of banking and it’s unclear how the Fed or other bank regulators can actually regulate them. There’s useful and somewhat crazy information in the 10Ks of the banks about what they are currently doing. You can find that in the footnotes of the letter.

Here is their letter:


http://www.washingtonsblog.com/2013/07/giant-banks-take-over-real-economy-as-well-as-financial-system-enabling-manipulation-on-a-vast-scale.html

[Judi Lynn]

7. Thanks for your link to the post, and this information.

It is tremendous seeing who's working on this.

Unbelievable situation!

[zeos3]

8. You're welcome, Judi Lynn.

I always find your posts informative. I'm glad I could contribute something this time.

[hankthecrank]

9. Banks soulless entity's

Really no end to the ways to make money if you have no soul

It seems like USA business has lost it's way