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New Document
JP Morgan & Goldman Sachs Under Investigation
July 22, 2013 • 9:18AM

In a major article today, the New York Times exposes the massive move to corner commodities markets, which has been made by the major Wall Street banks JPMorgan Chase and Goldman Sachs over the last 10 years. The Times expose comes on the eve of a hearing scheduled by the Financial Institutions and Consumer Protection Subcommittee of the Senate Banking Committee on July 23, which will "examine financial holding companies, and ask 'Should Banks Control Power Plants, Warehouses, and Oil Refineries?'"

If this activity sounds like the pre-Glass-Steagall U.S. financial scene which Franklin Roosevelt stepped in to quash, you are right. As the Times implies, indirectly and without mentioning Glass-Steagall by name, Glass-Steagall regulation would prevent this activity, which is ripping off the American public—individuals and businesses—big time.

As it happens, the Federal Reserve granted "exemptions" to the major money centered banks in 2003, which have given Goldman Sachs enormous power to manipulate and profit from the aluminum market, and the SEC approved a plan in late 2012 that put JPMorgan in position to take over up to 80 percent of the copper market.

While focussing on the aluminum market, the Times article asserts that "the maneuvering in markets for oil, wheat, cotton, coffee, and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cell phone." The banks have bought up huge swaths of infrastructure to hold and transport commodities as well.

The special exemptions the banks got from the Fed, to buy physical commodity trading assets, are supposed to aid in "efficiency," "increased competition," and to "benefit to the consumer." Bunk.

Senator Sherrod Brown, who will sponsor the July 23 hearing, is on record saying he wants the Fed to rein in the banks: "Banks should be banks, not oil companies," he said. "They should make loans, not manipulate the markets to drive up prices for manufacturers and expose our entire financial system to undue risk." The Fed officially confirmed it is reviewing the exemption


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