Here’s what’s in your Prime Interest today:
Markets are being manipulated! You already knew that. But when it makes the top fold of the Old Grey Lady, it must really be egregious. An investigation by the the New York Times reveals that Goldman Sachs has been manipulating the aluminum market for years. Coca Cola and other end users have complained that waiting times for shipments have gone from weeks to months. In the meantime, our Goldman friends charge needless storage fees. And the same shenanigans exist in copper and crude oil thanks to Jamie Dimon’s JP Morgan. We’ll be covering this story in depth this week. Today, we expose another mysterious event with a former Federal Reserve economist. He was fired from the Fed for exposing billions in suspicious cash transfers just prior to 9/11.
And Perianne digs into the fine print of gold to educate our beloved Chairman about that which he admitted before Congress he knows nothing. Never mind his New York Fed holds gold bars on behalf of other countries — so Germany thinks.
And, the saga in Detroit continues. Mayor Bing basically pleaded for a Federal bailout, citing the beneficial moral hazard this would engender for other struggling cities. Just, and we quote: “not yet.” Let them eat bonds! We’re no Marie Antoinette, but it when it comes to haircuts or guillotines, we choose the former. Bob duels Detroit native and Breaking the Set Producer, Ameera David on this very issue.
Finally, according to the government’s latest calculations on who’s buying and holding its own debt, foreign holders have slowed down purchases to the lowest rate since 2006. They now own less than 50% of Treasurys. As long as the Fed keeps buying — no problem. Except all this talk of tapering means the Fed wants to exit the market.
Oh, and speaking of those $85 billion per month purchases by the Fed, guess where that printed money is going? Hint: mostly to foreign banks. You won’t want to miss Justine Underhill’s expose of this.