Commodity Prices Spiked At London Loophole

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London's runaway commodity and metal markets and lax regulators are giving sleepless nights to millions around the globe. One day it is wheat, next day it is oil and then again it is Copper that gets spiked virtually.
The British Government has been always cagey about reforms and there is no congress as in the US or even a vigilant and vibrant press ( It has been  a Tabloid Press now for decades in UK and everything including news is a commodity, traded for a price ). London has over the years become the hot spot  for global Investors and hot money where Wall Street Bankers facilitate billion dollar deals to create volatility and profits. It has been pumping billions into virtual stocks at future markets that has little relevance to demand and supply.

Copper jumped during the month on speculation at London as the Wall Street Journal reported that a single trader in London cornered stocks of $3 billion, nearly 80% of the  LME registered stocks or 40% of the total global stocks of copper . The trader it is understood is being backed by the Wall Street Bank JP Morgan Chase, flush with funds from QE2, who is reportedly planning to control the physical trading through copper backed Exchange Traded Funds . Already ETF Securities another London based trader has reportedly sewn up stocks of  850 tonnes of copper.
London's notorious commodity markets where Wall Street Banks JP Morgan , Goldman Sachs, Morgan Stanley play the monopoly games with the big oil companies, mining and metal processing companies, grain traders and agricultural produce companies, is the hub of such speculative activity. Oil trade  has already been under Congressional  investigation in  the  US Senate   Senator Levin and others. A few months ago the New York Times reported that on June 30th  a single drunk trader Steven Noel Perkins moved the oil markets by $1.5 in two hours of wild betting that Oil prices will jump in the next 8 months by placing $520 million of forward trades.


 The FSA fined Perkins only a few thousand dollars and suspended his trading rights for 5 years but importantly did not penalize the firm  PVM for  regulatory lapses.The FSA has taken such lenient view of Morgan Stanley and other big banks also previously showing that it is not serious in curbing speculation . London regulators have the habit of winking at the big trading deals as they tend to
control the markets by connivance and pass on perks to the administrators who have helped create and run a virtual free for all environment.


 In this system a lead trader in a particular commodity corners stocks funded by a lead bank. All other investors follow the lead trader and creates a price peak. If the political pressure increases the investors climb off the commodity and go to the next and another lead trader starts cornering the commodity. The Global banks moves the funds and investors who are footloose and fancy free from commodity to commodity.