The return of Aunt Millie
by digby
It turns out that merely manipulating the financial markets for their own greedy purposes isn’t good enough for the masters of the Universe. They’re branching out:
Goldman Sachs has offered to speed up delivery of aluminum stored in warehouses that it controls as federal authorities examine how delays at the facilities have driven up the price of the metal.
Under scrutiny for the long waits that have cost manufacturers — and ultimately consumers — many millions of dollars, Goldman said on Wednesday that its warehouse unit, Metro International Trade Services, would give customers who store aluminum at the warehouses immediate access to their metal.
Through Metro International, Goldman stores vast amounts of aluminum in and around Detroit. An investigation by The New York Times found that Metro routinely shuffled tons of the metal from one warehouse to another, a tactic that profited Goldman but pushed up the price of aluminum across much of the nation.
Hold the phone, they aren’t alone:
Federal energy regulators said traders at J.P. Morgan Chase used eight different strategies to wring “excessive payments” from electricity markets, offering their first formal allegations of fraudulent activity after a yearslong investigation.
The Federal Energy Regulatory Commission released a two-page notice on the J.P. Morgan allegations Monday that is a precursor to an enforcement announcement.
The document describes several trading schemes, including submitting bids that “falsely appeared” attractive to electricity-system operators and led to payments to the bank valued at “tens of millions of dollars at rates far above market prices.”
In another strategy, traders bid at low prices in odd-numbered hours and high prices at even-numbered hours, leading system operators to pay J.P. Morgan for ramping up energy production, the document said.
The disclosures precede an expected settlement between the bank and agency, which are close to announcing a roughly $410 million fine to settle the charges, people familiar with the matter said. The settlement details could be made public as early as Tuesday.
The alleged manipulation occurred between September 2010 and June 2011 in markets that help set the price of electricity in California and the Midwest. FERC officials have said any improper payments are ultimately borne by the households, businesses and government entities that are end users of electricity, though it can be difficult to measure the precise impact on electric bills.
If that sounds familiar it should:
This is Bob Badeer (a trader at Enron’s West Power desk in Portland, CA, where all these tapes were recorded) and Kevin McGowan (in Enron’s central office in Houston, TX, as he mentions in the transcript):
KEVIN: So,
BOB: (laughing)
KEVIN: So the rumor’s true? They’re fuckin’ takin’ all the money back from you guys? All those money you guys stole from those poor grandmothers in California?
BOB: Yeah, grandma Millie, man. But she’s the one who couldn’t figure out how to fuckin’ vote on the butterfly ballot.
KEVIN: Yeah, now she wants her fuckin’ money back for all the power you’ve charged right up – jammed right up her ass for fuckin’ 250 dollars a megawatt hour.
BOB: You know – you know – you know, Grandma Millie, she’s the one that Al Gore’s fightin’ for, you know? You’re not going to –
BOB: Grandma Millie –
I suppose a lot of us thought that the Enron/WorldCom revelations in the early 2000s and then the derivatives debacle and 2008 housing meltdown might have had some effect on the behaviors of the MOU’s. We were wrong. They were undeterred.
Does anyone care anymore? I honestly don’t know.
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