The U.S. Senate’s Permanent Subcommittee on Investigations, chaired by Senator Carl Levin, released a 396-page report that details how Wall Street’s too-big-to-fail through shell companies, gained ownership of a stunning amount of the nation’s critical industrial commodities like oil, aluminum, copper, natural gas, and even uranium.
Federal law has encouraged the separation of banking and commerce. The role of banks has been seen as providing prudent corporate lending to facilitate the growth of commerce, not to compete with it through unfair advantage by having access to cheap capital from the Federal Reserve’s lending programs. According to the Levin Subcommittee report, “the Federal Reserve directly facilitated the expansion of financial holding companies into new physical commodity activities.”
Morgan Stanley hold “operating leases on over 100 oil storage tank field[s] with 58 million barrels of storage capacity globally and 18 natural gas storage facilities in US and Europe.” Morgan Stanley also had “over 100 ships under time charters or voyages for movement of oil product, and was ranked 9th globally in shipping oil distillates in 2009.” The company also owned 6 domestic and international power plants.
JPMorgan had a “significant global oil storage portfolio (25 million barrel capacity) … along with 19 Natural Gas storage facilities on lease.” It also reported that JPMorgan had acquired “Henry Bath metals warehouse (LME certified base metals warehousing/storage worldwide),” and that JPMorgan’s “total base metal inventory was as high as $8 billion” during the first quarter of 2012.
Bank of America had “23 oil storage facilities and 54 natural gas facilities…leased for storage.”
Goldman Sachs had four tolling agreements and a wholly-owned subsidiary, Cogentrix, with ownership interests in over 30 power plants; owned “Metro Warehouse which controls 84 metal warehouse/storage facilities globally” and qualified as a London Metals Exchange storage provider; had acquired a Colombian coal mine valued at $204 million, which had also included associated rail transportation for the coal. The report also found that Goldman Sachs had conducted “a uranium trading business that engages in the trading of the underlying commodity.”