Counterfeiting Scandals Keep Slamming the Commodities Market

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.4 • 1.6K Ratings

🗓️ 1 June 2023

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

Earlier this year, it emerged that the London Metals Exchange had been holding a bunch of bags filled with stones instead of the nickel needed to back trades for major commodities players, including Trafigura. Before that, commodities trader Mercuria was given painted rocks instead of the copper it was supposed to take delivery of. In short, the commodities world is no stranger to fraud. But what is it about the business of trading, moving and storing commodities that makes it so susceptible to scandal? In this episode, we speak to repeat Odd Lots guests and commodities collateral specialists Mercury Group CEO Anton Posner and President Margo Brock, about some recent episodes of counterfeiting in commodities world, why they seem to keep happening, and what could be done to prevent further instances from occurring.

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Transcript

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0:00.0	Adlots is brought to you by Interactive Brokers. Access to vast selection of global fixed income
0:05.0	securities at IBKR's Bond Marketplace. Search their deep availability of over 1 million bonds globally.
0:11.3	IBKR has no markups or built in spreads and low fully transparent commissions on bonds. IBKR
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0:21.8	In addition, clients can interact with each other by placing bids and offers online to execute
0:26.3	their trades. Learn more at IBKR.com slash bonds.
0:56.4	Hello and welcome to another episode of The All-Bots Podcast. I'm Tracy Alloway. And I'm Joe
1:14.6	Wyzontal. Joe, have you ever heard of something called the Tablet of A Nasser? I'm gonna mispronounce
1:21.3	that because my ancient Mesopotamian isn't up to scratch, but the tablet of A Nasser. No, never.
1:28.0	This became like a big internet meme. There were lots of jokes about it, but it was basically this
1:33.2	tablet, this old Mesopotamian tablet. I think it was like 4,000 years old with cuneiform written
1:39.2	on it. People sometimes talk about it as the world's oldest business complaint. You know, not only have
1:46.0	I never heard of this tablet, I'm actually struggling to like figure out what the next thing you're
1:50.9	gonna say is that connects it to this episode that's coming up. This is the most random intro to
1:56.0	what I like. I like this one. I like where you're going. I'm trying I'm trying to bring the historic
2:00.1	context, but okay, so written on this tablet was a business complaint against this guy A Nasser
2:05.6	who was a copper trader in ancient Mesopotamia and his customer had written a complaint basically
2:11.6	saying, you promised me a certain amount and type of copper. You gave me lesser quality copper
2:18.8	and I'm upset and you have to do something about it. So I get this is okay. Now I get how this
2:23.5	makes sense. And I guess this is like a phenomenon throughout history that if you're buying actual
2:27.8	physical stuff, there is a question of you enter into a contract. Did you actually get the stuff?
2:33.3	Is the stuff that the stuff that the person said they were going to give you? Is it actually
	...

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