Daily Archives: June 8, 2016

How to Make a Buck a la Goldman Sachs

Chicago board of trade futures market. image from wikipedia

Three years ago, your can of Coke suddenly cost a few pennies more. The culprits? The clever bankers at Goldman Sachs. According to a Senate panel, they gamed the global aluminum market, warehousing tens of thousands of tons of the metal in Detroit and delaying delivery to customers like Coca-Cola. The bank was able to ratchet up the price on its supply, netting several billion dollars in the process. The best part: Goldman didn’t do it as a hedge against other investments. The bank did it to make money for itself, at the expense of everyone else.Maneuvers like this are legal, but they’ve become more distasteful in the wake of the 2008 collapse, giving birth to the coinage of a term financialization…

Excerpts from David Sax  How Finance Ruined Business, Makers and Takers adds up the ill effects of Wall Street’s zero-sum game, Bloomberg BusinessWeek, May 19, 2016