Monday, July 29, 2013

Hoarders - the Bank Holding Company version...

Americans, dragged down by a sagging economy, high unemployment and a rather astonishing number of people living at risk of poverty, have new reality show to watch: Hoarders - the bank holding company version.

Emboldened by bonuses supplied by the US taxpayer and bolstered by the lack of any oversight or consequences for reprehensible behaviors on Wall Street that led to the collapse of the economy, America's biggest "bank holding companies" are expanding their businesses. No longer content to supply loans and CDOs and synthetic CDOs, those clever Ivy-educated bankers are in the commodities storage business.

And they're hoarding these commodities like those hoarders you can watch on A&E.

What does this mean? Your cans of Pepsi, Budweiser and Heineken have just gotten pricier. And the hoarders on Wall Street have just gotten richer.

This Business Insider story quotes a Goldman Sachs "commodities strategist" on how  "for investors, the case for holding commodities as a strategic move is still clear...."

Of course a Goldman Sachs strategist will say that - they're in control of the strategy and the activity that will lead to rising prices for commodities that the bank holding companies are pushing from storage facility to storage facility. (Once the commodity reaches the actual market and is sold, the price can't go up any higher, an alarming thought for any Goldman strategist...)

John Oliver on The Daily Show refers to it as a "merry-go-round of metal," and notes that "the new version of Monopoly is actually perfect. You just move pieces of metal around and around in a circle, collecting money whenever you want, and it's guaranteed that nobody is going to jail."

New York Times has weighed in on this, noting that:
"Policy makers must thoroughly investigate the aluminum warehousing strategies to determine whether Goldman and other warehouse operators distorted prices. They should also take a fresh look at whether banks should really be in the business of owning warehouses and other physical infrastructure."
Fat chance! In 2009, Dick Durbin went on a radio show and said:
"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."
So they own Congress. And now they own the storage facilities that can be used to park various commodities. And there's nothing anyone can do to stop them.

Or wait... perhaps there IS an entity that can hit back at the bankers with equal force. Not Congress... not consumers. The white knights that may come to America's rescue could be other capitalists - like those at businesses whose bottom line is being reduced by the greedy bankers who are hoarding what they need.

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