Melissa our top story tonight, and report Goldman Sachs is making billionat the expense of consumers by playing a shell game with aluminum. The investment banis sitting on a massive horde of aluminum shifting it from warehouse wahouse delaying shipments to customer to drive up the price we pay for everyday products. It could cost us, the conmer, 325 billion over the next several years. Maybe legal, still irritating come expensive. It is all the word on wall street. I want to start with you, because i wa to explain to our audience the mechanics of how this is happening. This is aluminum it purchased on the exchange in london. Goldman sachs bought the company that owns the warehouse that stores all this. They bought the storage facility. It means when somebody Takes Delivery of aluminum, it is stored in this warehouse. It is reported the wait time has gone from just s six weeks to nw 16 month. As a result, that drives up the ice, they are collecting rent on this,ustomers are making money on the aluminum going up. Is that really what is going on . Effectively yes. By managing to get a critical ma of aluminum in their warehouse, given the rules that limit the load out, the amount of golevery day, they have managed, t system has managed to get a lot of aluminum stock, so it went from less than six weeks to nine months today. The costst of buying aluminum, there are two prices, element price and premium. The premium has doubled to a record hh as a result of this. Melissa because it is so hard to get it. The industry requires at least 3000 tons o aluminum has to be moved out of these facilities every day, so they know there is this jugrnt, so they made rules to move it. Warehouse to warehouse to comply with the rule, do you believe all of this . They arshifting it from one facility to another facility. There are proposals to put teeth into these proposals and what is unclear, they get 1 of the rent paid back to it, isnt in a hurry to implement the rules. Once they go above a certain amount of metal in the warehouse to have to ship a certain amount out of the warehouse every day. Another that has been brought up is that they could mit the rent they are able to charge on backlogs. Melissa what do they get out of it . They are a part owner, and goldman put out a statement saying they do not own the metal in the facility, we merely store it. E warehouses are prohibited om trading the products. They say we do not own it, we are not benefiting ourselves, how are they benefiting th . It is a lot of banks and not just banks, it is also futures brokers, they want to own assets because they trade assssets for their own account. Owning tank, owning warehouse like this gives you information about the markeallows you to profitably trade it. Melissa does allow you to mapulate it or understand it . They are not cornering the market on anyone good, but by buding up so much aluminum they have increased the premium and the rent. It certainly is not flowing to any one person or necessarily any one entity because it is being paid on aluminum. But it is getting them money in terms of rental income so the reason there in the business is because they trade commodities. This gives them infortion. Melissa this reminds me a similar thing happened with Goldman Sachs whe on youralk abt th runup, storage facility, clever way to get into the market to have some control to undetand it better. Do you disagree with that, or is there re to ii than that . The cost is about 0. 05 per day per ton. They are charging 0. 48 per day per ton, so they get revenue from the rent, they get the benefit t from the premium, they benefit from the premium and they get strategic intel from the entire business model. Melissa i have asked to regulate the stem, they said the London Metal Exchange is broken. Just once again they are the smartest guys on the block, they figured out a way to get into the middle of th market and make a lot of money. They say jpmorgan wi be the next to do with jumping into the market. It is their way to changthis, or is this just part of the market . Yes, there is a way to change it. At the end of the day a Critical Mass of metal on one hand, that is the bottom line. That is on type of monopoly. Yes, there is a way to change this situation. Melissa just the smartest guys on the market or is there a way to change it . They have been very slow to once the rule changes because they benefit indirectly. Melissa can you make a rule to get ahead of them . The rules have to be updated for thera of deeppocketed investors whether anndividual warehous owner doesnt benefit in the same way as Goldman Sachs might. A secondary question of whether or not the New York Times asked if banks should be in the business at all. Melissa a question for another time on the difference between a speculator in the market or if you are real an enduser. Using aluminum to make something. Thanks to both oyou, great discussion. Timtime now for the fuel gauge report. Gas prices jumping 0. 12 in the past week the average price hit 3. 67 per gallon today. 0. 23 higher than the same time last year. Oil futures fell to th highest level in 16 months. Crude settled down 1 at 106. 91 per barrel. About 11 innthe month. I ran getting the lifeline from iraq of all places. 365 million deal to provide natural gas for iraq power generaon, a significant help to iran in desperate need of cash. The midwest led sanctions at the end of the day it really is all aboutoney. Next line money,iamis doing the best to steal detroits thunder. Charge of the city with broad. It has been cooking the books and may not be the only one doing it. A former federal prosecutor is here to explain. Plus, things could not look worse for detroit. We will call you one couple who could not be happier with their new life ithe motor city. The story everybody else is missing. Coming up. When we made our commitment to the gulf, bp had t big goals help the gulf recover and learn from what happened so we could be a better, safer energy company. I can tell you safety is at the heart of everything we do. Weve added cuttingedge technology, like a new deepwater well cap and a stateoftheart monitoring center, whe experts watch over all drilling activity twentyfourseven. And were sharing what weve learned, so we can all produc energy more safely. Our commitment has never been stronger. Melissa if youre wondering who is next after detroit, maybe miami. Charging with fraud for lying to investors about the strength of the municipal bond. It is not the first time, by the way. Hit with a ceaseanddesist order 10 years ago at into the fact in the past year harrisburg pennsylvania and the state of illinois have been charged with similar offenses. Wonder why more isnt being done to prevent municipalities from scamming investors. Here to answer that his former federal prosecutor. At is the story on this one because this isnt the first time, they do a shell game in miami taking money from one area to cover the facts are overspending and dumping it into the feral fund to cook the books and they are selling bonds based on the Financial Health area did theyre trying to get betterates based on the cookbooks so i dont have to spend as much money and Interest Payments during the life of the bond repayment so people rely upon this information. I miss ribs and tatian. The funny thing about this, have read the complaint, it is like 40 pages. Didnt really a page tner, busily every one of these bond transactions were undone and miami ended up having to overpay anyway. What jumps out to me is that it is a message about a lot of other cities because miami is done. Melissa is it a message or is it a message to but he is documents very closely when they go out and do the money and raise money and sell the bond, is it hard for the investor to know . Remember, its a message not so much to the investors as it is to the city. The snake would tell me the lawyers are going to read this very carefully and write a memo to their clients. To me is a memo to the city you better be careful because ultimately the money damages are not there. What the sec asked for in this case is in order to say miami dont do this anymore. Melissa they had that in 2003. They violated that order and went ahead and did it. Dohey have anyecourse because it is not worth what they were . If they can show they are not worth what they thought and they should have gotten a higher return because it was a risky investment, yes, civil actions will follow and you know whait is like, Class Action Lawsuit will start right behind this civil action but again not to beat a dead horse, almost every one of these transactions were undone prior to the time it even began so the real damages are not ther melissa can anybody go to jail in the long run . They talk about michael, the email trail related to him sending emails saying in esnce i dont think we can do this, dont want to do that, for projects that no longer need the money and prove that they needed the money anjust moved it over to the general accounting. Could he fed some sort of charges along the way . You know, melissa, looks an awful like Insider Trading which makes people wonder. This is not a situation where he had information not available to the general public and bought or sold securities based on information giving him an advantage over other people. He was a city employee. I am not trying to justify what the guy did. He is right at ground zero. Ultimately he was a guy worng for a city, the city was thone who was absolutely the one to benefit from this. Not like he got increase in salary or a commission Going Forward from the city. Melissa they did not get what they thought they were getting. You are asking about him. Melissa thank you so much for coming on. W to be tried were news of a bank of the residents fleeing. Now in 2012 the numbers have dwindled down to 701,000, but a nebreed of Young Professionals flocking to detroit because they see opportunity. With me now is one such couple making moved to detroit less than a year ago. Welcome to the show. Why did you move to detroit, what did you see . Like you said, it is basically cheap. If you had told me five years ago i would be in detroit, chicken, i would have thought you are crazy. But we came here because we are five years out of grad school, we have a lot of Students Loans left, but we like living in the city. We like that lifestyle, we wanted to y a house. That is what brought us to detroit. Meliss youre spending about 2200 per month on rent, i beeve. To buy a house comparable to what you have now, you think you could have spent 57000. What is your income like . It is tougher to make the same amount omoney. I took a little bit of a pay cut, he took a little b of a pay gain, so we came within a couple of thousand dollars from what we were making in chicago. Melissa are you worried about crime at all . A lot of people are wooed about crime, but were in a relatively stable neighborhood. The neighborhave some sort of private security, University Police or Something Like that, or a strg Neighborhood Block Club that keeps things strong. Melissa we hear stories about one of the reasons why this city should get bankrupt is because they dont have any money left for basic services, that you call 911 and pay for somedy to come, 50 of the parts have closed, is this a reality in detroit, or not cessarily see that everyday . If anybodyas to consider a move to detroit, it is important to consider in a neighborhood by neighborhoodasis where you live i. Melissa you look at portland, north carona, you dont hear a lot about people moving to detroit. But when how the city is going, what do your family and friends think . Did anybody come with you . Did they visit you, think you are cry . I definitely think i am crazy. The first thing i had to do was be my mom to show her the baby girl was going to be okay. My mom is from houston spent most of her time in st texas, so it was a little bit of a change but she absolutely loves it and is thinking about moving up here. She had no idea what it would be like. We took heto the favorite places, we had a very closeknit neighborhood. Out in around town. A lot of friends chicag curious of what is going on out here, checking it out. Melissa i know you guys dont have kids yet, would you have kids there . Do you worry about the School System . Not as much. If we were moving from the suburbs to the city to be a different calculation. But from Downtown Chicago to downtown detroit, you want your Public Schools to be at a certain level, chicago Public Schools were at a certain level. Detroit schools are worse in chicago, but they have to be a certain level to put your d there anyway. That was not mh of a difference. Melissa thank you for coming on, good luck to you and best wishes for the future. You are cap it and brave, good for you for seizing the opportunity. Next line money, has a curtain closed on the Box Office Flops . You may be shocked to hear what movies are making money. Plus the u. S. Oil boom is booming. Give any idea how much bigger could actually be . Why se states are not even trying to get in. Is yours one of them . Melissa matter what time it is, money is always on the move. Shares of netflix getti hit after hours. Estimates the subscriber growth came in below expectations. Adding 630,000 subsccibers during the quarter. Estimates were for up to 800,000, so that is raising concerns. Bscriber growth for netflix may be slowing. We will keep an eye on that one. Summer movie season in full swing but you would never know what looking at the numbers. Studios have been rolling out the big bucks for films like turbo, endedp bringing in less money than it cost. Ey have time. Yet the lowbudget horror flick the conjuring got twice the income. Steven spielberg said the movie industry is going to implode and could change the business forever. Thats ominous. Here to tell us of that is what is happening, dennis kneale. It seems like its almost a curse to spend a fortune on a movie. The bigbudget is not necessarily doing it. So what is going on . When they hit, they hit. Melissa producer the magic word, ironman 3. The sepals are doing great. But for firstime, it is a big risk. At hollywood is seeing is the Booming International box office. The easiest thing for them to sell are the special effects, so therefore over 190 million, it is not always rking. Melissa can you sell it in china and make your money back . China is the Fastest Growing big market but you have to have a hit in the u. S. It will save you from taking a hu charge. It will not save this any. 220 million budget, 300 combined cost from marketing and a chart on that around 170 million or something last time i checked. Melissa it seemed that formula might work. Caribbean, tt was a ride, for gods sakes. I tught that was ridiculous when the first one came out. Its ride. Its not even and yet it went bananas. Spielberg said rently, there is going to be an implosion with three or four, maybe half a dozen mega budget movies that ll crash into the ground. It will change the paradigm. What what is a new paradigm . Hollywood always said dreamworks was going to revolutionizthe business. You have a bunch of guys who run thetudios and you want a big budget films. You want the chance for a huge hit. World wars he started out slowly but is upwards of a half billion dollar mark. That has been a he success. You know what, size counts in hollywood, and won a big budget. Along comes the conjuring would cost only 20 million to make the brought in twice that. The purge which cost only 3 million to make the. Melissa horror flicks that bring in tough times. They went up to the Movie Theater and did god knows what. Women are sick of the ethics blockbusters. They madep over half the audience. Melissa what wod be the newgm . Everything changes. Do we go to something where it one thing they talkeabout was different ticket prices. You go to see iron man. It costs you 45. By package. You go to see one of the cheap, small, and the movies and its 9 i dont think that the i dont think tickets will be cheaper. That is certainly not going to happen, but what hollywood is learning, tap into the super nerd that will line up for days to see a movie. If you can charge 50 let people see it. Melissa what is the formula . That is the whole thing. The real formula is make better movies. Focusing on special effects. Not focusingn characters you care about. That is the new paradigm. Characters you ce about. Melissa what is the super neared what . Early access to movies, and elected the countrys spectacle. What hollywood needs to rise of was up to is the amount of women going in seeing movies now. A paramount executive told me recently that you cannot deny that young guys are the biggest force of the box office. In my mind you totally can. Look at films like world war see and the country. As on the movie and a horror movie, things you would not think. Majority female audiences. That is what should be on every executives mind. Women. Melissa women should be on everyones mind. Perfect. Here is our question of the day. What movie do you regret payg to see recently . At love this. Your answers are great. One that goes right to the heart of what were talking about, those of ranger. Hard to believe you could screw up the lone ranger, but captaan jack tantillo managed to just fine. A well. And an answer that surprised us was this one on faceboo a man of steel, 42 with the disappointment. Thats rough. Of lee that listed tickets. Melissa we want to hear from more of you. Follow me on twitter. All right. Coming up on money, if you think nothing is holding back the u. S. Oil boom, you could not be more wrong. A new port on what is standing in the wake. Plus,core a job in minut. Make some cash, no interview required. And new application that is revolutionizing the way businesses hire temporary workers. A real live demonration and sit down with e counder on whether or not it is the game changer for companies everywhere get ready to make some money. Can you ever have to much money . No way. This man is about to be the llionth customer. Would you mind if i go ahead of you . Instead we had someone go ahead of him d win fiy thousand dollars. Congratulations you are our one millionth customer. Nobody likes to miss out. Thats why ally treats all their customers the same. If your bank doesnt think youre special anymore,nth. You need an ally. Ally bank. Your money needs an ally. Melissa whether it is on wall street or main street, here is some 85 today. Cashing out after taking a big stake in yah hoo about two years ago. Selling of 41 million shares worth 1 billion. He bout those shares when they were wth about 440 million according toall street journal. That means that he made about 720 million on that investment. I hope he buys a nice bouquet of flowers, maybe some jewelry. Also making money today, goldbugs. Postmaster 1,300 per ounce. Its biggest one dayain in more than a year. Help feeling the rally. Selling in a one month i. That is not bad. Meanwhile, losing money, anyone who owns mcdonalds. There were no golden arches over the seven Second Quarter earnings. Came up short on profit expectations. Mcdonnells blames a stiffening competition inhe u. S. And poor Economic Conditions in europe and asia. Sinking stock more than two and a half . Thats okay. I will sti eat a bunch of price. Here on money, we have been all over our countrys use a profitable sale bone. Most of the focus has been on north dakota and texas, there are other stes jumping on the bandwagon. We are here live with more. What is the latest . Well, t states we are talkingbout have some good news, and they nt more. We are talking about colorado, wyoming, utah, new mexico, oklahoma. Over the past three years the states, and depending upon which one you are talking about, an increase in Oil Production between 23 and 64 . According to industry officials combined, these states couldd3 tshine ma producer in north dakota if it were not for one hold up. Regulation on federal land. In texas and north dakota, a lot of private land and state land where Companies Find fewer hurdles. Those we talked to blame the obam administrations Energy Policy for leaving some states behind while others dont. Mainly dealing with private landowners in the private development. So the regulatory hurdle,t is not to say that the industry is not regulated. For instance, a permit in texas or oklahoma or north dakota, you can get an 5945 days. Upper rim on federal land is 230 days. A much bigger process to go through. Lot of requirements. Sometimes folks forget that school does not come from a gas pump. Takes a long road to get there. A road that becomes much more bumpy with federal regulation. But the bureau of Land Management disagrees commission in his statement in part it reads the Obama Administration has made this an environmentally responsible expansion a priority. Domestic production has grown each year that the president has been in office with Oil Production currently higher than anytime in the past two decades. Conservationists say they are not against energy development. They want balance and explained that under this administration more acres of federal land had been leased and preseation o conservation. They draw the line at places like Mesa Verde National park in colorado. A pullback. What is right now is a we dont have, oil and gas production. The bom proposing to the lease lands in front of the national park. There are some places that it do not make any sense to be doing oil and gas drilling. Simply trying to protect our western heritage. Melissa all of these states with all of this potential, doing anhing about it . Theres only so much we can do. Its actually o by the federal government. When you think about texas and north dakota they have some much private and state land. They also have state governments that are friendly. There is really not a lot that the states can d melissa core of a job on the spot. Transforming the world of parttime work with the power of our smart phone. The donstrations. Its all of making money quickly. Melissa we all want to do what we want and make money. I do every day. One company is bringing that concept to the masses. Get a temporary day you could do when your own time, make a few extrollars. The company says it employs 300,000 temporary workers. They get paid just by using their iphone, going about their everyday activity. We want to know exactly how it works. Our own jo ling kent is in the street. Reporter i am hereith max, pretty much as super big locker. You have done almost 100 jobs. You are now over 600, is that right . Working for all kinds of companie i including restaurant reviews sites and microsoft doing jobs for the them. Hes never met a company representative. He goes right toork. We start at the metropolitan museum of art in new york for a job worth 8. Is says take one photo. I will go year. I hit the ad. And then taking the federal. And then they walk somewhere. Lets go. We can head to the guggenheim a much money wilwe make . Are going to make it more dollars. 8 with just one click in one photo. Yeah. In the goes right to your account. Yeah. All have the money within a few days. Then we headed off to our third job, taking pictures at a restaurant. But we hit a snag. It looks like theyre closed. A bummer. Losing out . What happens when you cant get in, maybe the planet was exactly right . In this case i would usually just note the time that the opening come back later, come back a different date. Then to start to another job. How much . Sixteen. Of bad. Under on time. We can go make another ten. All right. Smart phone army has simply did 4 milliojobs across the country. 5800 companies. They are not profitable yet, but they say they are expanding. Back to you. Melissa thanks. I guess it was only a matter of time before you could get hired from this march on. As easy as it may be for you to find it, the cpany behind says hiring is a lot of work. One of the cofounders. Thank you for being here. A lot of questions. First of all, i can see a student in the summer, time off. They go around and do this. Are there any bigger jobs are real jobs . Taking a photo with your iphone, youre not going to make a lot of money that way. Other bigger jobs . Two things. E people look coming to do jobs, they are doing just one. They see that there are 30 in a block radius. They will go do a 7 job and starts hping from one to the next. Melissa how much did you make . They were out for couple of hours. They tried to do three things, they get to done. One did not work out. Thirtyobs and a couple block radius. Now wait. We have people making a thousand, to thousand dollars a month just doing that. These people going out. Theyre bringing their kids with them, going during ten, 15 today. There really hopping around the city. Those are jobs that are kind of simple. You comment. You could take a picture. Maybe you photograph a restaurant. That kind of thing. As you start getting experience, we do is build these mathematical profiles on top of workers said. You are really give photographer , sicker shopper. Maybe youre gd at following complex instructions. We will start running higher pain, more complex job see which means that they might end up paying 30 of 40. So there will in the making tinted 15 an hour to starting, but they start getting into a cret shoppingobs. Maybe 150. Melissa net was one of my other questions. You dont know who these people are that you are handing over to your customers who are paying you. I understand you a splitting the money 37 the. A person who does the task is getting 70 and you g 30 . You dont want to send just any small how to do the job. Howdou insulate yourself . I would say that we actually know our workers better than regular employers to. We are doing is were actually going through and watching your Work Experience across many different data points, how long your onsite during th job, the quality of the work you did. And this w over not just a couple of jobs, but ts or hundreds of jobs if y you have concluded. That allows a step in delancey, out of thesether people who were the ten best that we got within a five block radius. Melissa can you charge a premium for that . Either Different Levels or you can say to my consent you a fantastic person. Absolutely. It depends on the kind of job that is to get done, h quickly it needs to be performed and how reliable and how urgent it needs be done. Melissa in order for you to become profitablet seems like you will have to build this network out to a lot of people. The other thing were focused on right now is expansion. We have 320,000 now across 60500 cities in the u. S. We just opened up and were starting to spread into other european markets. All of the money we are making this going toward that. Melissa your out there and watching people. You must do this. That person would be awesome. To is your ideal walker. The very first thing, we need to have things that permeate. Show up on time and do the work. Reliable enough to go and follow complex instructions and do whatever i is the need. If you can go and do those things you are top of my list. Melissa this sounds like those people would already have a job. A fulltime job. I know that there would be out there trying to do a dated a. We think of ourselves as a second paycheck for people. A breeze to at starbucks, a realestate agent. Its driving your car. Melissa very cool. Cool concept. Up next eventually every nanny needs a little time off. Maybe that is why new yorkers are paying lots of cash. Whitewater rafting. Seriously. You have got to hear this one. I dont have enough spare change for this spare change. You can never have too much money. It is time for spare change to date, they view for both of you for joining us. We have a royal baby b. We haveeestablished his net worth is half a billion dollars at birth but are you willing to put your money on and they . The top that is george a and james. I will go with jordan. There is a strong and persistent rumor in britain that his name will be frazier. Really . That is pprfect you get a royalty for that . I hope so. It looks like the new york elected officials are having a tough day. Governor cuomo and mayor bloomberg costing taxpayers 17000 it is not as tough as themayor of candidates they were in a bid to harlem to be more relatable to constituents. It is all a photo op. When you spend a night with the fily and you see the condition and reali that money from your city goes to find that and at is not hpening, i think it is pretty striking. A fatah what no doubt but we would hope it would resonate i agree. It is a wonderful experience the only modification they made was to put a Security Camera in anthony weer is room. [laughter] what about the rat race . He lost by 18 seconds and had he had the 20 alex pepsicola beforehe race he would have won. Tt is a great point. Have about a coffee dispenser that dispenses it the way you yawned och but gives a free cup of coffee if it can detect you yachting so do people just stand there to get free coffee . I dont love this idea. This the dumbest invention. It makes no sense. It is like ice cream and four dogs you walk to the machine and yon . In the beginning they would give it away for free got people to arbitron isis syem. And we are talking about. Is really publicitys. You should have seen through it. I just see a real baby named frazier. I think they will go with james civic there already is the jamieson in miami. [laughter] next is the willis a paid advertisement for starvista entertainment and time lifes music collection. These are songs about real life. Songs about love. Songs that come straight from the heart. Here you come again just when ive begun to get myself together oh, baby, im gonna love you forever forever and ever, amen mama, hes crazy crazy over me just the good ol boys never meaning no harm
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