Long waiting times are only a symptom of a larger problem facing the commodities market. Before 2003, the companies that made money speculating on commodity values and the companies that provide services — such as warehouse space — to consumers of these commodities had to be separate. But since a Federal Reserve ruling a decade ago, financial institutions have been able to buy and trade commodities, while also holding companies such as Metro International. Such combos have both the means and a financial incentive to create artificial scarcities. In 2010, J.P. Morgan was accused of manipulating the market to increase the value of copper it owned. Only under intense pressure from regulators did the company announce it would be exiting the physical commodities market.
editorial