Big Banks Pushing Up Gas, Energy Prices?

Jul 30, 2013 8:29am

Morning Business Memo:

Is financial speculation in commodities by big banks pushing up the price you pay for gas and electricity?

America’s biggest bank, JP Morgan Chase, has been accused of manipulating electricity prices in California and the Midwest. The Federal Energy Regulatory Commission says the bank used a variety of strategies to squeeze excessive amounts of money from state markets in 2010 and 2011. The accusations are similar to the allegations of price rigging by Enron more than a decade ago.

JP Morgan declined to comment, but the bank has previously denied any wrongdoing. It is reportedly in talks to settle the allegations. The Financial Times says the firm might agree to pay about $400 million to regulators. The commission recently levied a $453 million fine on the British bank Barclays for price-rigging in California and other Western states. Barclays is disputing the allegations.

There have been recent allegations about speculation in oil markets that could be pushing up gas prices for motorists. The Federal Reserve threatened to ban banks from trading physical commodities. In a recent statement, the Fed said it was reviewing an earlier decision that allowed banks to trade and own raw materials.

Time Warner pulled back from the brink after the cable giant announced it was turning off CBS TV programs in three major cities, and then quickly reversed its decision. Negotiations continued in the fee dispute. Both parties kept extending the deadline before midnight Eastern time, when Time Warner Cable said about 3 million customers in New York, Los Angeles and Dallas would lose the network and four CBS cable stations because of “outrageous demands for fees” by CBS. In response, CBS said it remained firm in getting fair compensation for its programming. Not long after the two sides traded claims, Time Warner Cable said it halted its plans to drop CBS at the broadcaster’s request.

What’s the biggest fast-food chain out there? Subway has nearly twice as many U.S. locations as McDonalds – 25,549 compared with 14,157 – but it’s no match when it comes to sales. McDonald’s sales last year topped $35 billion, while Subway took in $12 billion, according to a survey by QSR Magazine. Sales at the golden arches were more than Subway, Wendy’s, Burger King and Chick-fil-A combined.

Chrysler Group’s sales revved up in the second quarter, thanks to strong U.S. demand for trucks and SUVs. But the company still cut its full-year sales and profit targets after a slower-than-expected start to the year. Chrysler says profits rose 16 percent from last year to $507 million.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc 212-456-5100

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