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Related: About this forumWhy on earth does Goldman Sachs own a coal mine in Colombia?
Monday, Jul 22, 2013 04:18 PM CDT
Why on earth does Goldman Sachs own a coal mine in Colombia?
Big banks are increasingly operating their own commercial businesses. It's high time the Fed reigns them in
This piece originally appeared in Quartz.
In 1913, Congress determined that a cabal of Wall Street bankers had captured control over the US economy. Having bought up large shares of railroads, utilities, and manufacturers, these titans of finance had acquired the power to pick whether a business thrived or failed, and could effectively direct the nations commerce. t is fraught with peril to the welfare of the country, wrote the Pujo Committee, the investigating body.
In the century since, banks have mostly been prohibited from direct involvement in non-banking activitiestransporting and storing goods, for example, or running commercial businesses. But today, a handful of banks are back in the game of real stuff and services. Goldman Sachs, for example, owns a coal mine in Colombia and a giant metals warehouse in Detroit. Morgan Stanley owns and operates electric power plants outside Reno and delivers cargoes of liquefied natural gas to Argentina.
This fall, the Federal Reserve will decide whether to allow these two banks to continue owning and operating these businesses. Experts say that if Goldman Sachs and Morgan Stanley get their way, the result could vastly expand the reach and influence of the entire banking industryeven as lawmakers hustle for ways to rein in these same giants.
The banks stand to gain the most rights in markets for essential commodities, like oil, gas, metals, and electricity. Over the last decade, the Fed has allowed a handful of commercial banks to directly enter these industries, largely through circuitous back road legal processes. Its decision in this instance could open a highway for everyone.
More:
http://www.salon.com/2013/07/22/goldman_sachs_has_no_business_partner/
Judi Lynn
(160,542 posts)Vale sells Colombia coal mines to Goldman Sachs-led group
By Reese Ewing
SAO PAULO | Tue May 29, 2012 2:05am BST
(Reuters) - Brazilian miner Vale (VALE5.SA)(VALE.N) said on Monday it agreed to sell its thermal coal assets in Colombia for $407 million (259.9 million pounds) to a unit of Colombian Natural Resources, a mining company controlled by U.S. investment bank Goldman Sachs (GS.N).
Vale, the world's second-biggest miner, is shifting its focus away from thermal coal mining to concentrate on its operations in coking coal, a type of coal used by steel mills,
Under the agreement, Vale, will sell 100 percent of its coal mines El Hatillo and Cerro Largo in the department of Cesar, and its port terminal Sociedad Portuaria Rio Córdoba on the Caribbean coast.
Vale will also sell its 8.43 percent stake in the Ferrocarriles Del Norte de Colombia, which operates the railway between the mines and the terminal. Completion of the sale is dependent on regulatory approval from the Colombian government.
Goldman Sach's Colombian Natural Resources already owns a stake in the railway and mines in the same region.
More:
http://uk.reuters.com/article/2012/05/29/uk-vale-coal-idUKBRE84S00M20120529
WovenGems
(776 posts)...coal mines are great places to hide bodies.
Flatulo
(5,005 posts)After all, they are investments. If the investment produces a profit or loss, the bank wins or loses. You are free to buy or not buy into their investments.
What I think is wrong is when they use mortgage assets and play poker with those.
We used to forbid Wall Street investment banks from gambling with the assets from their commercial arms, but that was lifted in the nineties (Glass-Steagall), which many believe led to the financial meltdown.