IN-DEPTH: Goldman Sachs' swaps offer rebuts consumer claims

Goldman Sachs’ offer to provide end users with “immediately available aluminium”, in exchange for warrants stuck in delivery queues, is a deliberate plan to refute the testimonies given to a US senate subcommittee on warehousing, sources said.

“It is a very deliberate ploy to effectively counter the arguments of [global risk manager for commodities and metals at US brewer MillerCoors] Tim Weiner, given to the senate committee,” a trader said. “They are very publicly saying that they will do all they can to help end-users.” Goldman, owner of the Metro warehousing company since February 2010, made three suggestions in a press release on July 31, in addition to expressing support for the London Metal Exchange’s recently proposed rule changes regarding warehouse load-out rates. The bank suggested that the LME could implement a system whereby end-users are given priority in delivery queues; that the exchange provide more transparency “with respect to who owns the warrants for metals and to designate by broad market participant category who is in the queue”; and that Goldman itself provides aluminium for delivery in exchange for metal in a Metro delivery queue. But Goldman’s suggestions...


Jethro Wookey

August 01, 2013

16:25 GMT