Tuesday, July 23, 2013
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| (photo: Metro International Trade Services} |
Goldman Sachs is making a killing off “a merry-go-round of metal.”
Through a subsidiary, Metro International Trade Services, Goldman operates 27 industrial warehouses in the Detroit area that house huge stores of aluminum belonging to various customers. But the operation involves more than just warehousing tons of metal.
A fleet of trucks moves the aluminum around each day from one building to the next “to exploit pricing regulations set up by an overseas commodities exchange,” according to an investigation by David Kocieniewski at The New York Times.
By shuffling the aluminum around, it increases the storage time and thus the amount Goldman charges manufacturers that use the metal, such as for soda cans or beer cans. According to the Times report, since Goldman bought Metro in 2010, the average wait time for customers to have their purchases located and delivered has grown from six weeks to sixteen months.
This “industrial dance” by Goldman and other financial players has cost American consumers more than $5 billion over the last three years, the newspaper found.
-Noel Brinkerhoff
To Learn More:
A Shuffle of Aluminum, but to Banks, Pure Gold (by David Kocieniewski, New York Times)
