[vaseline2008]

Insight: Wall Street, Fed face off over physical commodities

Wall Street's biggest banks are locked in an increasingly frantic struggle with the Federal Reserve over the right to retain the jewels of their commodity trading empires: warehouses, storage tanks and other hard assets worth billions of dollars.

The debate is nearing an inflection point: Within 18 months, the Fed will likely either allow banks more freedom to invest in the physical commodity world than ever; or force them to sell off the assets that many banks are counting on to buttress their trading books at a time when they are already vulnerable because of intensifying competition and new trading curbs.

"That's why for many years the most successful traders had access to both markets, and why we've seen little sign they're moving quickly to divest these assets now. It's trading with material non-public information - the difference compared with equity markets is that it's perfectly legal."

Morgan Stanley bought terminal and logistics firm TransMontaigne and tanker operator Heidmar in 2006. Heidmar would grow to ship almost 750 million barrels of oil last year, the equivalent of roughly 8 days of global demand.
Last year, using TransMontaigne's own tanker truck fleet to haul oil, Morgan was one of the only traders able to take advantage of an unprecedented $25 a barrel gap between oil prices at the U.S. storage hub at Cushing, Oklahoma, and prices 500 miles south on the Gulf coast. Many other traders failed to find transport firms willing to lease them trucks.

OK, now discuss

[babystrangeloop]

You left out all the good parts:

Insight: Wall Street, Fed face off over physical commodities
David Sheppard, Jonathan Leff and Josephine Mason / Reuters / March 2, 2012

Morgan Stanley's commodity trading revenues have fallen by some 60 percent over the past three years. Goldman Sachs' commodities business revenues fell from $4.6 billion in 2009 to $1.6 billion in each of the past two years.

... It wasn't supposed to be like this.

After Goldman Sachs and Morgan Stanley converted to Bank Holding Companies at the peak of the financial crisis to gain emergency access to discounted Fed funds, many bankers confidently predicted that they would be able to carry on trading in much the same way as before. ...

Because "nothing much has changed"TM

[Pops]

Wall Street's biggest banks are locked in an increasingly frantic struggle with the Federal Reserve over the right to retain the jewels of their commodity trading empires: warehouses, storage tanks and other hard assets worth billions of dollars.

Yeah, I wrote last year about GS doing a deal with a refiner the upshot of which was that it would allow them to hold physical oil which isn't always legal for banks

My knee jerk is that I'm up to here with Wall Street and "financialization" and computerized gambling that privatizes profit and socializes risk.

[rangerone314]

That stuff makes me wish that someone with howitzers could shell Wall Street into a pile of rubble, and maybe K-Street in DC also. Wall Street needs Main Street more than Main Street needs Wall Street... they are parasites.

Wish we'd have a military coup led by someone friendly to Main Street America and do away with all the j@ck@$$3$.

The fatal flaw of marginally democratic societies like ours is that corruption ultimately grows and grows unchecked. There is no mechanism equivalent to "garbage collection" in computer operating systems or "excretion" in living organisms. Should be a revolution and a purge of the corruption every 75 years or so.

[pup55]

Banks: We want to invest in Commodities so we can convert the useless electronic paper you're giving us to something that can retain some value.
Fed: No, that kind of defeats the purpose. We want you to make that money available to actual people so they can start businesses and buy houses.

Banks: But the European banks can do what they want, why can't we?
Fed: They have problems of their own. That is why so many people have checked out of the Euro and bought Brent Crude.

Banks: It is anti-free-market for you to keep us from trying to diversify and make our portfolio more profitable.
Fed: Are you kidding? Free market? What about the 7 to 10 Trillion Dollars we gave you in 2008 because you could not make your margin call.

Banks: That was different. We want free markets when we win, but want you to pay when we lose.
Fed: Exactly. We would prefer not to bail out your commodity trading function. You are no brighter now than you were at that point.

Banks: We will wait until November. Romney will let us do what we want.
Fed: Sadly, that is right. What happens after that is beyond our control.

[Cog]

You will find no better friend to the banking system than Obama and Geithner. Follow how many bank CEO's have been prosecuted under their leadership and how the campaign contribution cash flows to Obama.

Your slam at Romney is unwarranted.

[SteinarN]

You will find no better friend to the banking system than Obama and Geithner. Follow how many bank CEO's have been prosecuted under their leadership and how the campaign contribution cash flows to Obama.

Your slam at Romney is unwarranted.

To cal it a slam was maybe a bit to much.

However you are right in that the current administration is friendly to Wall Street, If they were not, Wall Street would be 100 percent owned by the public today. In every other companies going bancrupt the previous stock owners were to be loosing all. But not so for Wall Street obviously.

However I would guess Romney will be even more friendly to Wall Street and big money in general. So my support to pup55 there.

[Cog]

A guess is a unsupported opinion. Just so you understand the difference. The amount of money from the banking industry flowing into the Obama campaign both in 2008 and currently is fact.

[Pops]

A guess is a unsupported opinion. Just so you understand the difference. The amount of money from the banking industry flowing into the Obama campaign both in 2008 and currently is fact.

That's true

In the 2012 election cycle, according to the Center for Responsive Politics, Romney's top five contributors are Goldman, JPMorgan, Morgan Stanley (MS), Credit Suisse (CS), and Citigroup (C), while other major financial industry donors include Barclays (BCS), UBS (UBS), and Wells Fargo (WFC). None of those companies rank among the top 20 contributors to the Obama campaign.

The flow of campaign money from large financial companies to Romney highlights the industry's priorities on a range for issues. For example, lobbyists for the the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association, trade groups that represent the interests of banks and securities firms, are angling to weaken rules contained in Dodd-Frank that would restrain speculation in the energy markets. Wall Street firms also are pushing back against another provision in the law called the Volcker Rule that seeks to restrict banks' ability to trade for their own accounts and to invest in hedge and private equity funds. Other areas of concern include proposed global capital requirements for large banks and the amount of risk mortgage lenders might have to retain on their balance sheets.
...
Romney has said he would repeal Dodd-Frank. By contrast, the Obama administration has made the law a hallmark of the president's re-election campaign, with U.S. Treasury Secretary Tim Geither writing in op-ed in The Wall Street Journal on Thursday arguing that Dodd-Frank established "safer and more modern rules of the road for the financial industry."

http://www.cbsnews.com/8301-504343_162- ... ign-funds/

80% of contributions over $1,000

Nearly half of the donors to Obama’s reelection campaign in 2011 gave $200 or less, more than double the proportion seen in 2007, according to the analysis from the Campaign Finance Institute, which tracks money in politics...

Just 9 percent of donors to GOP front-runner Mitt Romney, by contrast, came from the lowest end of the contribution scale, the study shows.

I never can figure out why so coy? The bumper sticker is "Billionaires for Romney"

[careinke]

Banks: We want to invest in Commodities so we can convert the useless electronic paper you're giving us to something that can retain some value.
Fed: No, that kind of defeats the purpose. We want you to make that money available to actual people so they can start businesses and buy houses.

Banks: But the European banks can do what they want, why can't we?
Fed: They have problems of their own. That is why so many people have checked out of the Euro and bought Brent Crude.

Banks: It is anti-free-market for you to keep us from trying to diversify and make our portfolio more profitable.
Fed: Are you kidding? Free market? What about the 7 to 10 Trillion Dollars we gave you in 2008 because you could not make your margin call.

Banks: That was different. We want free markets when we win, but want you to pay when we lose.
Fed: Exactly. We would prefer not to bail out your commodity trading function. You are no brighter now than you were at that point.

Banks: We will wait until November. Romney will let us do what we want.
Fed: Sadly, that is right. What happens after that is beyond our control.

Your post is confusing to me. The Fed IS the Banks, literally. If you changed Fed to Government, it would be more accurate.

[ian807]

Should be a revolution and a purge of the corruption every 75 years or so.

That's what elections were supposed to be. An election is a kind of institutionalized revolution that happens every 4 years or so. Unfortunately, that process has been subverted by the wealthy. As long as societies allow great concentrations of wealth and power, this will continue.

[vaseline2008]

Should be a revolution and a purge of the corruption every 75 years or so.

That's what elections were supposed to be. An election is a kind of institutionalized revolution that happens every 4 years or so. Unfortunately, that process has been subverted by the wealthy. As long as societies allow great concentrations of wealth and power, this will continue.

That is how evolution works, by competition. The losers die off and the winners get to have their genes live on. Why should it change? Mountains have a large base at the bottom to support the peaks at the top.

[rangerone314]

A guess is a unsupported opinion. Just so you understand the difference. The amount of money from the banking industry flowing into the Obama campaign both in 2008 and currently is fact.

We're debating who's a bigger whore, Romney or Obama? I guess while we're at it, we can discuss the semantics of being less of a virgin, or being more pregnant.