Summary of the Senate's Findings
November 20, 2014: Report and Member Statements has been published on hsgac.senate.gov ending a two year investigation into Wall Street involvement in trading physical commodities.
Jacques Gabillon was one of the witnesses who gave testimony.
Much of the discussion revolved around aluminium warehousing and so-called "merry go round" transactions. There was also discussion of so-called "BCR" or bid cost recovery payments.
Focus on Aluminium and Alleged Inflation of the "Midwest Premium"
Discontent among market participants (represented by the Aluminium Users Group, which includes Coca Cola) in the aluminium sector centred around the inflation of the "Midwest Premium" (similar concerns had been raised by industry consumers earlier to the European Commission) and also around extended time to take delivery from physical contracts due to queues at warehouses, created by "merry go round" transactions.
Goldman Sachs entered into a number of these deals with Red Kite (which is said to also hold more than half of the LME's copper inventories).
November 20, 2014: Report and Member Statements has been published on hsgac.senate.gov ending a two year investigation into Wall Street involvement in trading physical commodities.
Jacques Gabillon was one of the witnesses who gave testimony.
Much of the discussion revolved around aluminium warehousing and so-called "merry go round" transactions. There was also discussion of so-called "BCR" or bid cost recovery payments.
Focus on Aluminium and Alleged Inflation of the "Midwest Premium"
Discontent among market participants (represented by the Aluminium Users Group, which includes Coca Cola) in the aluminium sector centred around the inflation of the "Midwest Premium" (similar concerns had been raised by industry consumers earlier to the European Commission) and also around extended time to take delivery from physical contracts due to queues at warehouses, created by "merry go round" transactions.
Goldman Sachs entered into a number of these deals with Red Kite (which is said to also hold more than half of the LME's copper inventories).
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