[UPDATE] Too many people are missing the crux of this NYT piece and getting hung up on various conspiracy theories or fixating on the NYT's inconsistent math.

The scam, and that's all it really is, is quite simple. Before GS took over, delivery times on a customer orders for delivery of warehoused product were measured in weeks (somewhat reasonable), after they took over, delivery times are measured in years (wholly unreasonable).

Suppose you parked your car in one of those automated parking garages that racks'em and charges by the hour. You park your car come back for it, and they say "come back in 3 weeks and we'll have it ready for you". OK its irritating that you have to pay 3 weeks rent + however long you were off running errands, but at least you'll get the car back sometime this month or next. Now GS buys the parking garage and the wait time to get your car back jumps from a few weeks to over a year. Oh, BTW, your rental fee tab keeps running during that year+ delay. That's the scam in a nutshell -- run out the clock to increase rental fees.

How those increased rental fees and egregious delivery delays ripple through the system and what their net effect is people will argue about forever, but all that is irrelevant to the scam GS is running.

Some have asked why GS would get involved in such a seemingly petty warehousing hustle, there's no big scores in the warehouse business, its usually kinda mundane. Its not mundane if you can buy a mundane business and increase fees from (X storage days+(3 weeks)) to (X storage days+(70+ weeks)).

Know this -- there is ALWAYS an effect from institutionalized inefficiency. It WILL be non-zero. It WILL raise prices. Increased costs ALWAYS raise prices.

Focus on THE SCAM, not the extraneous details that have derailed others looking at this story.

...a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars...

...a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again...

...The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal...

a tenth of a cent or so of an aluminum can’s purchase price can be traced back to the strategy. But multiply that amount by the 90 billion aluminum cans consumed in the United States each year — and add the tons of aluminum used in things like cars, electronics and house siding — and the efforts by Goldman and other financial players has cost American consumers more than $5 billion over the last three years

Maybe we need to stop using this word "capitalist", and start using "oligarchy"? Egregious parasitic inefficiency like this can't exist in a genuinely capitalist system for too long without a market response.

This scheme apparently hasn't been in operation for too many years now, so maybe there is a capitalist response in the works. A co-op storage facility run collectively by all the GS victims would work, freezing out the GS scammers. That would also allow for participants to execute their own localized material swaps/substitutions and reduce reliance on spot markets when shortages happen as well. Some things need to be very specific alloys for technical reasons, others don't.

Such a facility could also coordinate scrap re-utilization to maximum effect. Perhaps the physical format and metallurgical aspects of Company A's scrap is usable by Company B as raw material? Perhaps Company A could alter their stamping dies a bit and stamp parts for Company B as a freebie side effect of stamping their own parts? Without someone hawking over the incoming scrap bins looking for commonality, that sort of synergistic production doesn't happen.

Posted by: Purple Avenger at 06:35 AM | Comments (292)
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• Ayn Rand's Starnesville Come To Life
  
• Royal Baby Expected Today
  
• Michael Barone: The Unheavenly City
  
• The Rise Of The Warrior Cop
  
• For Black, Empathy With Obama Trumps His Dreadful Economic Record
  
• After Detroit Bankruptcy Filing, City Retirees Go To Court To Protect Their Plunder Pensions
  
• IRS Scandal Circles Back To Lerner
  
• Eurozone Debt Burden Hits All-Time High
  
• Divided By Design
  
• How The Media Distorted A Tragedy
  
• Some Cosplay Costumes From ComicCon
  
• McCain Thinks Stand Your Ground Laws Should Be Reviewed
  
• A CEO's Eye View Of Obamacare
  
• Fewer Americans Wave First Amendment Banner
  
• New York Mayoral Candidates Sleep In The Projects For One Night For Some Reason
  
• The Wealth Tax Revisited
  
• Where Are All Of Eliot Spitzer's Friends Now
  
• What Earth Looks Like To Saturn
  
• Hamas Website Pays Tribute To Helen Thomas
  

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Posted by: Pixy Misa at 05:00 AM | Comments (198)
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Happy Monday.

Ah, just the sort of fresh ideas we've come to expect from this President. This week President Obama is going to pivot to jobs . . . and attack Republicans. "The President thinks Washington has largely taken its eye off the ball on the most important issue facing the country." Translation: the idiot who spent the last week politicizing Trayvon Martin's death wants to talk about something else now.

Doctors are skeptical and confused about the Obamacare exchanges.

NY food stamp recipients are shipping welfare-funded groceries to relatives in Jamaica, Dominican Republic, and Haiti.

Muslims in France are reacting to the country's face veil ban exactly like you'd expect.

Posted by: Gabriel Malor at 02:50 AM | Comments (297)
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2 busy 4 wordz so u no get.

A Guide to Your Choices

Actually modern liberalism includes quite a lot of what used to be unique to socialism. And I don't think modern paleo-cons are opposed to public education.

Posted by: Maetenloch at 05:47 PM | Comments (735)
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Posted by: Purple Avenger at 05:06 PM | Comments (178)
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Our final part in the summer Milky Way Galaxy Guide brings us to the constellations Cepheus and Cassiopeia.

As always, the Milky Way is best enjoyed from a dark site, but the focus objects this week are visible with binoculars or a telescope from more urban areas.

We will also briefly discuss a particularly bright deep sky object in nearby Andromeda, one which is intriguing from any optical viewpoint (naked eye, bino or with a huge telescope).

Posted by: CAC at 04:31 PM | Comments (135)
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Today, these years ago Michael Collins, Command Module Pilot, Edwin "Buzz" Aldrin, Lunar Module Pilot and Mission commander Neil A. Armstrong were on they're their (ok, shit.. got it) way back to earth.

It's hard to recall because it's not spoken of much, the years of preparation and testing. The Gemini program was mostly about how to dock spacecraft. Learning things.

There was drama on the landing. There was drama before the ascent from the moon too. "While moving within the cabin, Aldrin accidentally broke the circuit breaker that would arm the main engine for lift off from the Moon. There was concern this would prevent firing the engine, stranding them on the Moon. Fortunately a felt-tip pen was sufficient to activate the switch.[48] Had this not worked, the Lunar Module circuitry could have been reconfigured to allow firing the ascent engine."

It's also hard to imagine now, the "space race". Seems so quaint today in 2013, but there was a time when we as a nation asserted ourselves as a force not for enslavement or conquest but a beacon to the rest of the world. Apollo 11 was like a giant ad for "freedom". As was the NASA mission.

My .02 anyway. more...

Posted by: Dave in Texas at 12:04 PM | Comments (592)
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To be revealed at "Panel H" at Comic-Con:

Warner Bros. is expected to announce at its Hall H panel that as the follow-up to Man of Steel, it is pairing two of the most recognizable superheroes in the world for a one-two punch that will be directed by Zack Snyder.

Henry Cavill will reprise his role as Superman, but it is unclear who will play Batman in the new film. A release date of 2015 has been set, with tentative plans for a Flash movie appearing in 2016 and a Justice League movie in 2017, sources said.

Yeah, I just can't wait for the Dark n' Gritty Flash where we really explore the rich psychomythology of Flash's backstory.

These guys know that not all superheroes are Batman, right?

Posted by: Ace at 09:29 AM | Comments (200)
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Morning, all.

Ben will be along directly with a gun thread.

Posted by: andy at 03:28 AM | Comments (268)
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You know what is even more boring that watching people play EVE? Watching the yearly Alliance Tournament that kicked off yesterday. I would embed the stream but I fear of breaking the blog, so watch it here.

Other than that, another short week more...

Posted by: Gang of Gaming Morons! at 11:05 AM | Comments (53)
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