Not Just Goldman Sachs: Koch Industries Hoards Commodities as a Trading Strategy

[deminks]

http://www.thenation.com/blog/175387/not-just-goldman-sachs-koch-industries-hoards-commodities-trading-strategy#

Over the weekend, The New York Times published its investigation of how Goldman Sachs has made a tidy profit by buying up vast amounts of aluminum and slowing the delivery through the ownership of vast warehouses. Many investment banks purchase physical assets, like pipelines or storage facilities, to gain better market intelligence for speculative trading. The Goldman Sachs strategy, detailed first by Bloomberg News and by Reuters in 2011, has boosted the cost of aluminum, hitting both manufacturers and consumers with higher prices.

Worth noting: Koch Industries, a company often inaccurately described as simply an oil or manufacturing concern, is highly active in the commodity speculation business akin to the big hedge funds and banks like Goldman Sachs.

As Fortune magazine reported, when oil prices dropped from a record high in July of 2008 to record lows in December of that year, Koch bought up the cheap oil to take it off of the market. Koch leased a number of giant oil tankers, including the 2-million-barrel-capacity Dubai Titan, to store the oil offshore. The decrease in supply increased the price for consumers that year, while Koch took advantage of selling the oil off later at higher prices.

(end snip)

Funny we don't have cable shows or late night jokes about 1% hoarders...

[Vinnie From Indy]

1. These guys make La Cosa Nostra look like children with a lemonade stand

K&R