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By, for example, deliberately delaying delivery while owning a significant segment of the available commodity, such as Goldman Sachs did with aluminum a decade
by GolfPopper 3y ago
By, for example, deliberately delaying delivery while owning a significant segment of the available commodity, such as Goldman Sachs did with aluminum a decade ago. [1], while simultaneously selling derivatives based on the very commodities they were manipulating. To the best of my knowledge, there were no consequences - if anyone knows of a financial penalty or change to law or regulations, please share!
1. https://www.usnews.com/opinion/blogs/economic-intelligence/2013/07/24/how-goldman-sachs-and-wall-street-manipulate-alumnimum-and-other-commodities https://www.usnews.com/opinion/blogs/economic-intelligence/2...
- lotsofpulp 3y agoI agree that there is concern of malfeasance in that scenario, but I was under the impression the context of the discussion was solely around the purchase and sale of contracts for the commodities (i.e. betting on the future price of a commodity), not manipulation of the actual supply and demand.
- GolfPopper 3y agoWhen the same legal entities are in a position to do both (participate in the futures market and manipulate supply and demand) I do not see how or why you would try to make such a distinction. It feels like you're trying to say, "this market would work fine if it weren't for those meddling bad actors" as a response to "the problem is the bad actors".