Courtesy of Pam Martens.
Senator Sherrod Brown
If you think Wall Street’s rigging of foreclosures to struggling homeowners, or rigging interest rate swaps sold to municipalities, or rigging the Libor interest rate benchmark is the extent of its cartel activities, think again. Today, in U.S. Senate chambers, expert witnesses will make the case that the London Metal Exchange (LME) has become little more than a rigged Wall Street game to benefit a handful of powerful Wall Street firms while costing consumers and the economy greatly.
The Senate Banking Subcommittee on Financial Institutions and Consumer Protection, chaired by Senator Sherrod Brown, will hold a hearing titled: “Examining Financial Holding Companies: Should Banks Control Power Plants, Warehouses, and Oil Refineries?”
Timothy Weiner, Global Risk Manager of the giant beer brewer, MillerCoors LLC, has told the Senate in his written statement that his company’s concerns about the London Metal Exchange are shared by many other companies, including The Coca-Cola Company, Novelis, Ball Corp., Rexam, Dr. Pepper Snapple Group, D.G. Yuengling Brewing Company, North America Breweries, Rogue Brewery and Reynolds Consumer Products, among others. All of these companies need easy access to aluminum for beverage cans or other consumer products.
According to Weiner, under exemptions the big Wall Street firms obtained from the Federal Reserve:
“…U.S. bank holding companies have effective control of the LME, and they have created a bottleneck which limits the supply of aluminum. Aluminum prices in general and for can sheet in particular have remained inflated relative to the massive oversupply and record production. What’s supposed to happen under these economic conditions? When supplies rise while demand is flat to down, prices should fall.”
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