Not only have the nation’s banks fully recovered from the financial crisis, their bottom lines are now healthier than ever.
On Wednesday, the Federal Deposit Insurance Corp. said profits at U.S. lenders hit an all-time high in 2013. For the year, the nation’s banks made a collective $155 billion. That’s up 10% from a year ago, and it was more than the $148 billion the banks made back in 2006, the last time profits peaked.
For the last three months of 2013, banks made $40.3 billion. That was also an all-time high, and a rebound. Bank profits were down in the second and third quarters of the year.
The FDIC noted a large portion of the bottom line boost, though, came from an accounting maneuver that other regulators have cautioned about.
But banks aren’t just buying stuff, they’re buying whole industrial processes. They’re buying oil that’s still in the ground, the tankers that move it across the sea, the refineries that turn it into fuel, and the pipelines that bring it to your home. Then, just for kicks, they’re also betting on the timing and efficiency of these same industrial processes in the financial markets – buying and selling oil stocks on the stock exchange, oil futures on the futures market, swaps on the swaps market, etc.
Allowing one company to control the supply of crucial physical commodities, and also trade in the financial products that might be related to those markets, is an open invitation to commit mass manipulation. It’s something akin to letting casino owners who take book on NFL games during the week also coach all the teams on Sundays.
The situation has opened a Pandora’s box of horrifying new corruption possibilities, but it’s been hard for the public to notice, since regulators have struggled to put even the slightest dent in Wall Street’s older, more familiar scams. In just the past few years we’ve seen an explosion of scandals – from the multitrillion-dollar Libor saga (major international banks gaming world interest rates), to the more recent foreign-currency-exchange fiasco (many of the same banks suspected of rigging prices in the $5.3-trillion-a-day currency markets), to lesser scandals involving manipulation of interest-rate swaps, and gold and silver prices.
But those are purely financial schemes. In these new, even scarier kinds of manipulations, banks that own whole chains of physical business interests have been caught rigging prices in those industries. For instance, in just the past two years, fines in excess of $400 million have been levied against both JPMorgan Chase and Barclays for allegedly manipulating the delivery of electricity in several states, including California. In the case of Barclays, which is contesting the fine, regulators claim prices were manipulated to help the bank win financial bets it had made on those same energy markets.
And last summer, The New York Times described how Goldman Sachs was caught systematically delaying the delivery of metals out of a network of warehouses it owned in order to jack up rents and artificially boost prices.
The top Obama administration officials working on the Trans-Pacific Partnership came to government from investment banks who will benefit immensely from its provisions, which severely curtail countries’ ability to pass laws regulating banks and other corporations. These top advisors, who came from Bank of America and Citigroup, were given multimillion-dollar exit bonuses when they left their employers for government. For example, the US Trade Representative, Michael Froman, was handed $4M from Citigroup as a goodbye gift on his way into his new job.
A third of the mansions on the most expensive stretch of London’s “Billionaires Row” are standing empty, including several huge houses that have fallen into ruin after standing almost completely vacant for a quarter of a century.
A Guardian investigation has revealed there are an estimated £350m worth of vacant properties on the most prestigious stretch of The Bishops Avenue in north London, which last year was ranked as the second most expensive street in Britain.
But he argued against increasing taxes on unoccupied homes, which he said would be an “annoyance” that would make buyers choose Monte Carlo or Milan instead of London.
So there’s a housing shortage in London, and “people with no economic or cultural ties to the city will move out” is supposed to be a threat?
The rich buying enormous houses so they can sit and rot then complaining people might actually want to tax them for it and threatening to take their “buying an enormous house to sit and rot” business elsewhere is such a breathtakingly good metaphor for the state of the world.
An estimated 2,500 demonstrators braved the cold and snow this evening to protest against the pending partial sale of state-owned energy provider DONG to US investment firm Goldman Sachs.
Parliament’s Finance Committee is set to vote on the controversial deal tomorrow. If it pass, Goldman Sachs take a 19 percent stake in DONG at a cost of eight billion kroner.
The partial sale of DONG Energy to Goldman Sachs took a shocking turn this morning after Annette Vilhelmsen, the head of government coalition party Socialistisk Folkeparti (SF), announced that she would step down as head of the party and the party would leave the government coalition.
Vilhelmsen called a meeting this morning after she was unable to obtain a consensus in her party on agreeing to the government’s pending DONG/ Goldman Sachs agreement, which is set to be decided on in parliament later today.
“It’s been a dramatic 24 hours. I must admit that there has been disagreement in the party, at a national level and in the parliament group,” Vilhelmsen said at the press conference at Christiansborg. “I couldn’t gather the party.”
Not only is this Goldman Sachs, the 19 percent they are buying are being sold at almost half of it proper evaluation, there where pension funds that where willing to pay more and Goldman Sachs would have veto right despite only owning 19 percent.
It makes you wonder which politicians they paid.
Global inequality has increased to the extent that the £1 trillion combined wealth of the 85 richest people is equal to that of the poorest 3.5 billion – half of the world’s population – according to a new report from development charity Oxfam.
Boris Johnson has launched a bold bid to claim the mantle of Margaret Thatcher by declaring that inequality is essential to fostering “the spirit of envy” and hailed greed as a “valuable spur to economic activity”. In an attempt to shore up his support on the Tory right, as he positions himself as the natural successor to David Cameron, the London mayor called for the “Gordon Gekkos of London” to display their greed to promote economic growth…
In highly provocative remarks, Johnson mocked the 16% “of our species” with an IQ below 85 as he called for more to be done to help the 2% of the population who have an IQ above 130.
The lovely Boris, 49, in the most difficult decision of his life, decides he’ll say nice things to rich people.
A lot of people all over the world are having opinions now about the ostensibly gigantic $13 billion settlement Jamie Dimon and JP Morgan Chase have entered into with the government.
The general consensus from most observers in the finance sector is that this superficially high-dollar settlement – worth about half a year’s profits for Chase – is an unconscionable Marxist appropriation. It’s been called a “robbery” and a “shakedown,” in which red Obama and his evil henchman Eric Holder confiscated cash from a successful bank, as The Wall Street Journal wrote, “for no other reason than because they can and because they want to appease their left-wing populist allies.”
This is Madoff all over again, only on a much huger scale. Ten years from now, bet on it, the Wall Street Journal will be denouncing everyone from Eric Holder to Lanny Breuer to the SEC and DOJ officials in the Bush administration for failing to protect investors from predatory companies like Bear Stearns, Washington Mutual and their parent, JP Morgan Chase.
Right now, however, these papers are still stuck in the denial phase, which is to be expected, I suppose. But it doesn’t mean we have to take these ridiculous editorials about Chase’s victimhood seriously.
A few more notes on the deal. This latest settlement reportedly came about when CEO Jamie Dimon picked up the phone and called a high-ranking lieutenant of Attorney General Holder, who was about to hold a press conference announcing civil charges against the bank. The Justice Department meekly took the call, canceled the presser, and worked out this hideous deal, instead of doing the right thing and blowing off the self-important Wall Street hotshot long used to resolving meddlesome issues with the gift of his personal attention.
Only on Wall Street does the target of a massive federal investigation pick up the telephone and call up the prosecutor expecting to make the thing go away – and only in recent American history would such a tactic actually work.
Considering the scale of the offenses involved (one could make the argument that Bear Stearns and Washington Mutual by themselves did enough damage and cranked out enough toxic loans to cause the 2008 crash) the state could have taken the hardest of hard lines. Instead, they once again took a big fat check to walk away.
A 41-YEAR-OLD native of Monaco increasingly looks to be to banking what Edward Snowden is to American surveillance. In 2008 Hervé Falciani walked out of the Geneva branch of HSBC where he’d worked for three years, clutching five CD-Roms containing data on tens of thousands of account holders. The theft has lobbed a bomb into Europe’s private-banking market, spawning raids and tax-evasion investigations across the continent. In the latest, 90 Belgian agents swooped on the homes of two dozen HSBC clients this week, including several diamond dealers in Antwerp.Mr Falciani went on the run when the Swiss charged him with data theft. After moving to Spain he was jailed, but freed after a judge denied a Swiss extradition request. At one point, he claims, he was kidnapped by Mossad agents who wanted a peek at the client names. He has now taken refuge in France, where the government has offered him protection in return for assisting in its hunt for tax dodgers.
JPMorgan Chase & Co (JPM.N) has reached a tentative $4 billion deal with the U.S. Federal Housing Finance Agency to settle claims that the bank misled government-sponsored mortgage agencies about the quality of mortgages it sold them during the housing boom, the Wall Street Journal reported on its website on Friday.
The deal is for less than the $6 billion the agency initially sought, the Journal said, citing people close to the discussions.
Even the full $6b would not have been much of an incentive never to do this again.
JP Morgan devoted $9.3 billion to legal expenses last quarter, driving its net loss of $380 million. Its legal troubles took up 39% of its total revenue in the same period, by far the company’s largest single expense.
That’s right: The largest bank in the United States spends more money fighting and paying off legal and regulatory challenges than it does paying its staff, buying securities or paying rent on its 5,600 Chase retail bank branches.
What does your largest expense say about your business? Ideally, the biggest cost should get at the heart of what the firm does. Goldman Sachs’ largest expense was compensation and benefits for its (in)famous talent. Apple’s largest expense in its most recent quarterly report was on sales, largely new stores and employees. General Motors’ largest expense is building cars.
For the first time, the bank revealed its total expenditures on legal costs. Since 2010, JP Morgan has devoted $31 billion to legal problems, spending $8 billion on settlements and reserving $23 billion for future costs. That’s almost half of its net earnings ($57.5 billion) in the same period, keeping in mind some of those reserves can be returned to stockholders if settlements and legal fees turn out to be less than expected
Markets swung rapidly on the 2 p.m. announcement last Wednesday, with stocks, bonds, and the price of gold all skyrocketing. Somebody placed massive orders for gold futures contracts betting on exactly that outcome within a millisecond or two of 2 p.m. that day — before the seven milliseconds had passed that would allow the transmission of the information from the Fed’s “lock-up” of media organizations who get an early look at the data and the arrival of that information at Chicago’s futures markets (that’s the time it takes the data to travel at the speed of light. A millisecond is a thousandth of a second). CNBC’s Eamon Javers, citing market analysis firm Nanex, estimates that $600 million in assets could have changed hands in that fleeting moment.
There would seem to be three possibilities: 1) Some trader was extraordinarily lucky, placing a massive bet just before a major announcement that would make that bet highly profitable. 2) There was a leak, either by a media organization with early access to the data or even someone at the Fed. Or 3) The laws of physics have been violated as the information traveled from Washington to Chicago faster than the speed of light.
You can see why Option 2 looks the most plausible.
Presumably there will be a hard look into what exactly happened, and in particular whether some technical glitch allowed some high frequency trading firm to get the data a few milliseconds early, or some unethical behavior. But in the meantime, there’s another useful lesson out of the whole episode.
It is the reality of how much trading activity, particularly of the ultra-high-frequency variety is really a dead weight loss for society.
Nokia’s board of directors seems caught in a tragicomedy of epic proportions. The latest twist is Finland’s largest newspaper claiming that Nokia made a false statement about CEO’s bonus package last Friday. Pressed by Finnish and international media last week, chairman Siilasmaa had claimed then that the bonus structure of Stephen Elop’s contract in 2010 was “essentially the same” as the one the previous CEO had received. But the largest daily of the country, “Helsingin Sanomat”, decided to dig into SEC filings to investigate the matter. By early Tuesday morning, the newspaper had uncovered evidence that Nokia’s board had made fundamental changes in Elop’s contract compared to his predecessors.
According to changes implemented in 2010, Elop was entitled to immediate share price performance bonus in case of a “change of control” situation… such as selling of Nokia’s handset division. Curiously, his predecessor Kallasvuo had no such clause in his contract. This adjustment meant that unlike previous CEOs, Elop was facing an instant, massive windfall should the following sequence happen to take place:
- Nokia’s share price drops steeply as the company drifts close to cash flow crisis under Elop.
- Elop sells the company’s handset unit to Microsoft under pressure to raise cash
- The share price rebounds sharply, though remains far below where it was when Elop joined the company.
Should this unlikely chain of events ever occur, Elop would be entitled to an accelerated, $25M payoff.
Many years ago MIT’s Andy Lo made a simple point (weirdly, I haven’t been able to track down the paper) about the distortion of incentives inherent in financial-industry compensation. Suppose you’re a hedge fund manager, getting 2 and 20 — fees of 2 percent of investors’ money, plus 20 percent of profits. What you want to do is load up on as much leverage as possible, and make high-risk, high return investments. This more or less guarantees that your fund will eventually go bust — but in the meantime you’ll have raked in huge personal earnings, and can walk away filthy rich from the wreckage.
But surely, you say, investors will see through this strategy. They can’t consistently be that stupid or naive, can they?
Rolling Stone has since learned that a whistleblower complaint has been filed to the SEC identifying 16 of the world’s biggest banks and hedge funds as the allegedly even-earlier recipients of this key economic data. The complaint alleges that this select group of customers received the data anywhere from 10 minutes to an hour ahead of the rest of the markets.
The identity of these 16 firms has not been made public yet, but sources describe the firms as major financial institutions, many of them well-known to the general public. Their inclusion in this case would significantly expand the scope of the scandal.
Contacted by Rolling Stone today, the SEC declined to comment on the status of the case.
Darryl Layne Woods, the former CEO of a Missouri bank, admitted in court yesterday to using financial crisis bailout funds to purchase a luxury waterfront condo in Florida, Dealbook’s Peter Lattman reports.
In November 2008, Woods, 48, who was the head of Mainstreet Bank and the bank’s holding company Calvert Financial Corporation, applied for TARP money on behalf of his bank, a press release states.
In January 2009, his bank received $1,037,000. A month later, he used $381,487 of it to buy a place in Fort Myers, Florida.
He pleaded guilty to misleading federal investigators about how he used the TARP money.
A former JPMorgan Chase & Co. trader wanted by the United States for allegedly falsifying bank records to cover up $6 billion in trading losses was arrested in Madrid Tuesday, Spanish police said.
A statement said Spaniard Javier Martin-Artajo, 49, was arrested after he presented himself to police in Madrid, who had located and asked him to turn himself in.
When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it. The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3 percent unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.
Former JPMorgan Chase traders Javier Martin-Artajo and Julien Grout were charged by US federal prosecutors for manipulating bank records and understating losses in the $6.2 billion ‘London Whale’ financial debacle of 2012.
In a blow to Wall Street and America’s largest bank by assets, prosecutors filed charges against Martin-Artajo, 49, a former London-based managing director and trading supervisor, and Grout, 35, an ex-trader at the London office.
The two charged men, whose arrest warrants were issued August 9, haven’t been located by authorities. Grout, a French national, is reportedly in France, and Martin-Artajo is reportedly on a planned holiday, according to statements from their respective lawfirms.
Back in 2012, the major US banks settled a federal mortgage-fraud lawsuit for $95,000,000. The suit was filed by Lynn Szymoniak, a white-collar fraud specialist, whose own house had been fraudulently foreclosed-upon. When the feds settled with the banks, the evidence detailing the scope of their fraud was sealed, but as of last week, those docs are unsealed, and Szymoniak is shouting them from the hills. The banks precipitated the subprime crash by “securitizing” mortgages — turning mortgages into bonds that could be sold to people looking for investment income — and the securitization process involved transferring title for homes several times over. This title-transfer has a formal legal procedure, and in the absence of that procedure, no sale had taken place. See where this is going?
The banks screwed up the title transfers. A lot. They sold bonds backed by houses they didn’t own. When it came time to foreclose on those homes, they realized that they didn’t actually own them, and so they committed felony after felony, forging the necessary documentation. They stole houses, by the neighborhood-load, and got away with it. The $1B settlement sounded like a big deal, back when the evidence was sealed. Now that Szymoniak’s gotten it into the public eye, it’s clear that $1B was a tiny slap on the wrist: the banks stole trillions of dollars’ worth of houses from you and people like you, paid less than one percent in fines, and got to keep the homes.
Remember when BART helped a few giant multi-national corporations establish lucrative tax shelters?
You probably don’t. It hasn’t been written about much in the press. The type of deal BART agreed to has gotten some attention, but even so, most people are unfamiliar with the scheme and how it works. BART’s tax shelter deals almost cost the transit agency $40 million in 2009 when the financial sector was melting down. One of the agreements withered and BART lost $5.5 million. Few people know this.
So what sketchy tax shelters am I talking about? They’re called lease-in, lease-out, or LILO agreements. BART calls them lease, leaseback agreements in their financial reports.
In a LILO deal a public transit agency like BART leases its trains or train operating equipment to a private corporation for some extended period of time. The corporation immediately turns around and leases the property back to BART. The terms of the lease are incredibly complicated and circuitous. I wont go into details here. It’s the kind of creative accounting and contract law that vast financial disasters are made from, and it’s mind-numbing in detail.
Why would BART ever do this you ask?
The most immediate answer is because it provided up front cash payments to BART which the agency then capitalized over a period of future years. This had the effect of easing BART’s budgetary strains, and providing BART with more borrowing capacity. It was the closest thing to free money the agency had ever been offered besides its cut of the regional sales tax, and it could be gotten without political pain, without appealing to voters for a bigger trim of retail sales. And BART wouldn’t need to confront the big real estate corporations in San Francisco and Oakland that have benefitted so much from the system. Million of dollars could be generated out of a shuffle of paperwork and a fictitious transfer of capital through a circular lease agreement.
Of course there’s no such thing as free money. The money that BART obtained from the deals was cut from the profits that BART’s private financial partners were making through the LILO agreements. These profits came not out of any productive investment activities or new efficiencies, for the LILO deal didn’t meaningfully transfer or redeploy ownership of BART’s assets, nor did it redeploy the lease payments into any other economic activity. Rather, the profits were harvested from federal tax deductions claimed by the private corporations leasing and then subleasing BART’s trains and equipment. It was, in the words of Senator Charles Grassley, “a good old fashioned tax fraud.”
Of course BART would never characterize it that way. Nor will the financial corporations that have been the instigators of these deals.
Latvia is resisting calls to extradite a man the US alleges wrote a computer virus used to steal millions.
In January, Latvian Deniss Calovskis was named by the US as one of the creators of the Gozi virus.
Latvian courts have twice rejected US extradition requests and its foreign minister has now backed their stance.
In a statement, he said the potential jail term Mr Calovskis faced was too severe for the crimes he is alleged to have committed.
They ran a “modern-day bank robbery ring, that required neither a gun or a mask”, said US attorney Preet Bharara in January.
Mr Rinkevics said the US sought a jail term for Mr Calovskis that exceeded 60 years.
Continue reading the main story
In my view, such a penalty is disproportionate to the amount, and so far no-one has been able to conclusively dispel my fears that it might be otherwise”
Latvian minister Edgars Rinkevics
While he could not take a view on whether Mr Calovskis broke the law or not, the jail term amounted to an effective life sentence, he wrote.
“In my view, such a penalty is disproportionate to the amount, and so far no-one has been able to conclusively dispel my fears that it might be otherwise,” he said.
I know some other folks worthy of jail sentence who are still running a “modern-day bank robbery ring, that required neither a gun or a mask”…
The Commodity Futures Trading Commission (CFTC) is probing 15 banks over allegations that they instructed brokers to carry out trades that would move ISDAfix, the leading benchmark rate for interest rate swaps.
Pension funds and companies who invest in interest rate derivatives often deal with banks to insure against big movements in the ISDAfix rate or to speculate on changes to interest rate swaps
ISDAfix is published each morning after banks submit bids for swaps via Icap, the inter-dealer broker, in a number of currencies. The CFTC has been investigating suggestions that the banks deliberately moved the rate in order to profit on these deals.
Given the hundreds of trillions of dollars worth of interest rate derivatives trades that occur annually, even the slightest manipulation can have a substantial effect. The CFTC, which started to investigate ISDAfix after last summer’s Libor scandal has now been handed emails and phone call recordings that show the rate was deliberately moved, according to Bloomberg.
Barclays has reportedly handed the CFTC information, while employees at Icap and Citigroup have also been questioned. In its interim results statement yesterday, Royal Bank of Scotland also said it was co-operating with authorities regarding the investigation.
Man, we are going to slap their wrists so hard.
Visualisations of corporate ownership for six banks: Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JP Morgan and Wells Fargo.
A New York jury has found former Goldman Sachs trader Fabrice Tourre liable for fraud in a complex mortgage deal that cost investors $1bn (£661m).
Jurors concluded that the trader, who nicknamed himself “Fabulous Fab”, had misled investors in the run up to the global financial crisis in 2008.
Complex mortgage investments played a significant role in the crisis.
Mr Tourre was found liable in six of the seven fraud claims brought by US financial regulators.
He was accused by the Securities and Exchange Commission (SEC) of misleading investors about investments linked to subprime mortgages that he knew would fail.
Because the case is civil rather than criminal, he faces possible fines and a ban from the financial services industry.
Michael, who is father of three and husband, asked RTV6 not publish his last name.
His family has lived at 11889 Esty Way for 10 years until April, when they decided to move to a bigger home and rent out their townhouse.
Michael found a tenant, but he was forced to refund the money when their townhouse was locked and the utilities were turned off.
“Our lender changed the locks on us,” Michael said.
A notice was left on the Esty Way townhouse from Safeguard Properties , a company that works with mortgage lenders in securing homes being returned to the banks.
Safeguard’s posting alerted the family that, “all persons entering this property (must) provide an explanation of their visit, sign and date the form.”
Michael was locked out, even though his bank statements show he is current with his mortgage and his loan doesn’t mature until 2033.
“The woman told me — this is something that I will never forget, honestly — she told me that they were the mortgage company, and if they wanted to change your locks, they could,” Davis said.
Anyone hoping to get into the walk-in lock boxes of this very special Swiss tax haven must first surmount a number of hurdles. At the first door, an employee has to type the right combination of numbers into a small screen. The next hurdle is a large steel barrier that has to be rotated counter-clockwise until it snaps into place, followed by a heavy steel door that resembles a submarine bulkhead. Behind it is a drab corridor with doors on both sides. Only the renters have keys to these doors.
The employee of Geneva Free Ports & Warehouses Ltd. remains discreetly in the background while the owners of the locked-up treasures count their gold bars or examine their collection of paintings being stored in the warehouse.
The Nahmad dynasty of art dealers reportedly has 300 Picassos in storage in Geneva. Countless Degas, Monets and Rothkos are also stored on the inhospitable premises. The estimated value of the works is in the billions. Hardly any museum can boast such a valuable collection.
Those who use the warehouse are genuinely wealthy. According to the Capgemini World Wealth Report, there were 12 million millionaires in the world last year, with combined assets of $46.2 trillion (€35 trillion), or 10 percent more than in the previous year.
An Athens County woman is looking to get her belongings back after a bank incorrectly broke into her house and took them.
Katie Barnett says that the First National Bank in Wellston foreclosed on her house, even though it was not her bank.
“They repossessed my house on accident, thinking it was the house across the street,” Barnett said.
Barnett, who had been away from the house for about two weeks, said she had to crawl through the window of her own house in order to get in after she used her own key that did not work.
Some of the items in her house had been hauled away, others were sold, given away and trashed.
It turns out the bank sent someone to repossess the house located across the street from Barnett’s house, but by mistake broke into hers instead.
“They told me that the GPS led them to my house,” Barnett said. “My grass hadn’t been mowed and they just assumed.”
She called the McArthur Police about the incident, but weeks later, the chief announced the case was closed.
Barnett said that according to the bank president, this was the first time something like this has happened.
She presented him with an $18,000 estimate to replace the losses, but the president refused to pay.
Nice to have to police to help you when your stuff is nicked…. “Someone stole your home and all your shit? Sorry call back when you have a real crime to report, like someone smoking a joint.”
The town of Lac-Megantic is taking legal action against the rail company at the heart of this month’s fatal train derailment in the community. Mayor Colette Roy-Laroche says Montreal, Maine & Atlantic has not yet paid any of the workers it hired to clean up the crude oil that leaked from dozens of tanker cars.
She told a news conference today that Lac-Megantic has paid the workers $4 million so far after some threatened to walk off the job. Roy-Laroche says lawyers have been told to inform MMA that it must pay up right away. She described the situation as completely unacceptable.
Forty-two bodies have been found since the blaze and explosions on July 6, with another five people missing and presumed dead.
Good luck on collecting from that bunch.
Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.