First of all, the "market distorting regulation" you mention that causes Goldman Sachs to shuffle aluminum around is not a government regulation, it is an industry standard set by the London Metal Exchange. The article suggests that there is a conflict of interest. The Exchange get's 1% of the storage costs, and the same companies that benefit from this rule are the ones that control the Exchange. This is a classic case of monopoly and collusion, not of overreaching government rules a regulation.
The "rules and regulations" that are proposed in the article are simply to reinstate the principle that bankers should not be traders. What's happening is that Goldman Sachs has physical assets in the aluminum market, and also the ability to speculate on that market. From the article: "By controlling warehouses, pipelines and ports, banks gain valuable market intelligence, investment analysts say. That, in turn, can give them an edge when trading commodities. In the stock market, such an arrangement might be seen as a conflict of interest — or even insider trading. But in the commodities market, it is perfectly legal."
How are the "little guys" hurt by preventing insider trading? Do you plan on founding a startup that speculates on commodities and also controls those commodities? Do you think that such a startup should exist or would be capable of bootstrapping without hundreds of billions in initial capital? Startups are only able to exist in the cracks created when we take the hammer to the monopolies.
The little guy is an actual Aluminum Extrusion company, with actual people making an actual product. Jacking up prices of raw material even 1% is taking profit out of his pocket because he certainly cannot pass that cost on. (I used to work for a small company in that business)
He is hurt because he is small and barely getting any discount at all. So all these imagined charges hit HIS pocket for 5% or more "off the top" because he can't avoid buying from the warehouses.
The "rules and regulations" that are proposed in the article are simply to reinstate the principle that bankers should not be traders. What's happening is that Goldman Sachs has physical assets in the aluminum market, and also the ability to speculate on that market. From the article: "By controlling warehouses, pipelines and ports, banks gain valuable market intelligence, investment analysts say. That, in turn, can give them an edge when trading commodities. In the stock market, such an arrangement might be seen as a conflict of interest — or even insider trading. But in the commodities market, it is perfectly legal."
How are the "little guys" hurt by preventing insider trading? Do you plan on founding a startup that speculates on commodities and also controls those commodities? Do you think that such a startup should exist or would be capable of bootstrapping without hundreds of billions in initial capital? Startups are only able to exist in the cracks created when we take the hammer to the monopolies.