JPM, Goldman chased out of metal storage biz as HK- owned LME to crack down.
It looks like the LME’s new Chinese-based owners are kicking ass and taking names in the metals warehousing sector, with the LME ownership itself serving as leverage to influence the warehousing practices.
To any who needs the dots connected, PMs warehousing, with its anomolous lengthy delays (100+ days to withdraw metal, as recently reported), has become a key manner in which the wholesale PMs market has been kept dysfunctional, with delay and shortages "developing" to keep overt price impact muted and prevent a feedback loop of wholesale (and downstream retail) demand from (rightly) boosting the main PMs price benchmarks. And of course, this practice would tend to boost the apparent warehouse stocks as well.
If there were any questions about whether the Chinese would be content to sit back after purchasing the LME and let the game be played as it was before, with the Western banking cabal continuing to distort and exploit virtually every corner of the precious metals market, this should answer it. I have rarely seen anything like this — the top two trading banks, JPM and GS, fleeing with their tails between their legs, as an exit from a sector after a mere three years represents.
This heartens me very much. History is being made, friends!
Key excerpt below:
"The LME has cratered the valuations of these companies," said one rival trading house executive.
The LME’s proposed rule change takes aim at bottlenecks that slow the delivery of metal out of their sheds.