JPMorgan bought the nickel that turned out to be stones | Hacker News Reader

JPMorgan bought the nickel that turned out to be stones

wsj.com

53 pointsmetaphor45 comments

> The LME didn't disclose the name of the company that believed itself to be the owner of nickel briquettes valued at $1.3 million at current prices. The firm was JPMorgan, according to the people, some of whom said the bank first bought the material several years ago.

$1.3 million. JPMorgan. Nothing to see here people, move along.

It’s still amusing that this happens to a big company and not just eBay buyers or whatnot. They buy a commodity and stuff it somewhere, then open it up much later to find its old newspaper and copies of ET for the Atari.

At least ebayers... open stuff up when it arrives.

A tale as old as history. Literally. https://www.thearchaeologist.org/blog/complaint-tablet-to-ea...

This is HN though. Shouldn’t we pull out all of our VC money from JPMorgan Chase, just to be safe? Tell all your friends.

Yes—and for many reasons, of which this is a teardrop in the ocean.

Yep. They just lost 0.000347% of their market cap! Let's start a bank run.

Everyone else that’s left their money there is just risking holding the bag!

I think it's more of a "where there's smoke, there's fire" thing. Who would brazenly commit fraud like this over a $1.3 million shipment of nickel?

Apparently, it has been quite a profitable (and relatively expensive) metal to ship. Even most other metals like iron or steel are ~100x less expensive.

It's hard to tell from the article, but this could be another wrinkle in the Prateek Gupta and TMT metals fraud.

https://www.business-standard.com/article/companies/trafigur...

Ah. Yes, a possible connection to a $577 million fraud case would seem to cast doubt on this being "an isolated case and specific to one warehouse in Rotterdam".

steel scrap is around $0.05/lb and has been under $0.02 before. at that point what do you really use for fill that won't stand out?

copper is cheaper than nickel and people bring in plate and hide weights in it all the time

Could this incident be a sign of a more widespread practice going under the radar, or does the fact that it was caught mean others would also have been caught?

The article mentioned that other metals owners and warehouses are going around double checking nickel in storage after this incident so if it is widespread we will find out shortly

Only if they acknowledge it. Lots of folks pretend it never happened to them.

There was a $577 million nickel fraud earlier this year.

https://www.wsj.com/articles/swiss-trader-trafigura-hit-by-s...

https://www.wsj.com/articles/the-man-trafigura-blames-for-a-...

Oh hey, Credit Suisse was involved. Imagine that.

Apparently (i don't know firsthand, but have friends in this game), this happens somewhat frequently. Physical commodity trading seems to be the wild wild west.

Not to mention this falls on Access World Group (as a subsidiary of Glencore PLC) with Glencore (a mineral multinational) having 2022 revenues greater than $250 billion US per annum.

It's a literal rounding error (albeit likely evidence of warehouse theft) in an industry where operating nickel mines have a fleet of 100 tonne haulpaks each of which has an ownership cost of > $1.3 million (truck + tyres + maintainance + 24/7 crew costs).

The issue isn’t JPMC it’s LME. LME has a strong reputation for quality of service. This calls into question that reputation, and the damage of that is far in excess the $1.3m.

I especially enjoy the banner running right now "Live coverage". if the news cycle is slow enough, a bag of rocks can attract live coverage. Screenshot for posterity: https://pasteboard.co/hBp3IllYcVRr.png

That said, I happened too look up the price of some industrial metals a few hours ago and happened to notice nickel going for 23k/ton. So 154 tons would fetch you a nice house in most neighborhoods.

Its big news because folks like gold bugs have been sounding the alarm that there's a lot of fake metal circulating keeping metals artificially low (implying the West is far more broke than it seems)

Take it however you want, but the LME selling fake metal is a pretty big deal

How much of the west’s wealth is stored in metals? I’d be surprised if it’s 1% of the actual money supply.

In Canada, none. Sold off their gold reserves cuz we got more than enough in the ground (and speculating in the thing that everyone else speculates on is kinda dumb)

Not much, and a good argument against gold bugs is "why gold"?

The problem for the West is that we've put all our eggs in the dollar basket. Our prosperity presume that the people with natural resources and the people that build things will continue to accept dollars because they don't have anything better to settle accounts with.

I'm not saying a dollar collapse is imminent, but perhaps we should have a backup (euro doesn't count. Its a joke)

I wonder if they'll file a complaint.. https://en.m.wikipedia.org/wiki/Complaint_tablet_to_Ea-nasir

When I was interested in precious metals, there were conspiracy theories alleging that various repositories of gold bars don't actually hold the amount that they claim.

I wonder what those blogs and Web forums with the affiliate links for societal collapse supplies think about this nickel story.

I never put much stock in those stories but it doesn’t help that the USA won’t let any other countries audit their own gold holdings in our national gold storage facilities.

Yeah, some conspiracy theories state Fort Knox never held gold (or at least they don't now that the gold standard was done away), and is now used to hide the Roswell alien and other such items. Even movies have used it as a joke/plot device.

I mean, such a theory is not exactly UFO-level crazy. What happened to "Show me the incentive and I will show you the outcome"?

Most of what I saw was relatively plausible stories, like the Comex allegedly refusing to let people take delivery.

I suppose more people would believe that story, than would believe one that manages to include space aliens or Elvis.

Ancient business advice: Don't take any wooden nickels. Nor stone nickel, for that matter.

The LME is terrible at doing the things a clearinghouse is supposed to do.

There was talk about this problem a few years ago, because lots of Chinese firms were using this stuff as collateral for loans. Apparently the fears were borne out in this case.

There has been a bunch of nickel fraud this year see:

https://www.youtube.com/watch?v=UMQe5wVnlsM

They're not getting their nickelback.

this is cold. stone cold!

always be wary of canadian exports

    Maybe you wonder what it is
    Makes people good or bad
    Why some guy, an ace without a doubt
    Turns out to be a bastard
    And the other way about

    I'll tell you what I feel
    It's just the nickel under the heel
    Oh you can live like hearts and flowers
    And everyday is a wonderland tour
    Oh you can dream and scheme and happily put
    And take, take and put
    But first be sure
    That nickel's under your foot

    Go stand on someone's neck while you take him
    Cut into somebody's throat as you put
    For every dream and scheme, depending on whether
    All through the storm
    You've kept it warm
    That nickel under your foot

    And if you're sweet then you'll grow rotten
    Your pretty heart covered over with soot
    And if for once you're gay and devil-may-care-less
    And oh so hot

    I'll know you've got
    That nickel under your foot

I don’t know that reference or buy that paywall.

It sounds like some sort of reference doesn’t it?

They literally owned 54 tonnes of nickel that was actually just stone.

It's the awkward use of "the Nickel" for no clear reason

The only way the headline makes any sense is if this is a follow-up to an ongoing saga where it’s like, “hey so you know all that nickel that turned out to be stone? They had bought it all!”

I believe that's exactly what's going on here. I recall first hearing about this story a few weeks ago

Paywall bypass posted above...

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