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Why was the law against onion futures passed in the first place? Couldn’t the same scheme be done with garlic, or sweet potatoes, or turnips or something?
by joegibbs 7d ago
Why was the law against onion futures passed in the first place? Couldn’t the same scheme be done with garlic, or sweet potatoes, or turnips or something?
- chirau 7d agoBecause Vincent Kosuga.
- gostsamo 7d agoA guy cornered the market in the fifties, caused a scandal, they made a special exception.
- shawn_w 7d agoTwo guys. At one point bags of onions were being sold for less than the value of the bags they were in... They also got onion farmers to buy back onions they'd already sold.
- joegibbs 7d agoBut what I’m saying is, why did they only cover onions? I don’t think there’s anything stopping someone from cornering the market in other commodities just as easily
- weakened_malloc 7d agoBecause the size of the market was/is so small that you're actually able to corner it. Oil or Treasury futures are far too big that no single person could ever corner it.
- microtherion 7d agoThough the Hunt brothers made a pretty good run at the Silver market in 1980.
- defrost 7d agoChina went all in on rare earth concentrate processing, taking the environmental hits that no one else wanted to touch. That paid off in a concentrated lock on the bulk of rare earth applications.
- mhh__ 7d ago> Treasury futures are far too big that no single person could ever corner it. Well, you'd think, but squeezing the CTD bond was completely accepted practice well into the noughties until PIMCO flew too close to the sun and faced regulatory wrath.
- baobabKoodaa 7d agoThere are many other small markets as well, and yet, this law is not called the "Don't Corner Small Markets Act".
- chadgpt6 7d agoThis came from the times when Congress wasn't deadlocked. If someone cornered a different small market they could make another law against that.
- baobabKoodaa 7d agoThe point is that it's silly that the law is specific to onions, and the explanation "it's because onion market was small enough to be cornered" is unsatisfactory because there are other small markets too
- manquer 6d agoJust like solving math or programming in a general sense is much harder than a specific solution , so is passing a broader law. We don’t complain about switch cases in code when there is two or three switches we start refactoring once it starts to proliferate. The law is no different , passing a wider ban would not get the votes easily or quickly and the interested parties the onion industry have no reason to push for it neither does the lawmaker acting on their interests. If said small markets also had exceptions passed seeing the onion one there could have been case to be broad. It would premature optimization to otherwise, based on just need for elegance , code or law has to work first even if dirty .
- pjc50 7d agoBecause American lawmakers are weirdly specific brainless creatures. This is how you get all those laws named after individuals like Megan, and my other specific fave, the Video Rental Records Privacy Act. Shall we address the general question of privacy, or just close the particular breach that affected a congressman? You know it's going to be the latter.
- QuadmasterXLII 7d agonarrowly scoped laws limit the blast radius of a stupid law without the political price of opposing a law in the aftermath of a disaster that law would have prevented. imagine if they had banned commodities trading in general!
- specialist 7d ago> weirdly specific brainless creatures Legislative product management, by committee.
- howunfortunate 7d agoThis one is a great example of how a Republic can avoid the worst excesses of direct Democracy A direct democracy might have just banned all futures.
- zugi 7d agoThe particular brainless lawmaker behind this act went on to become President. I think that shows Americans love and reward brainless lawmakers for creating these brainless laws.
- joecool1029 7d agoTo be fair it’s probably important to note he was never elected president…
- deleted 6d ago[deleted]
- 6d ago
- altairprime 7d ago302 https://news.ycombinator.com/item?id=49764037 https://news.ycombinator.com/item?id=49764037
- hristov 7d agoNo because none of these things have futures traded on a major exchange. Agricultural commodities whose futures are traded on major exchanges are very few. Now of course your question will be couldn’t the same be done with a commodity whose futures are traded, such as corn or wheat. The answer is it is difficult to say. One thing anyone cornering the market has to consider is government intervention. In this respect onions are perfect. They are merely a condiment. Nobody is going to starve for lack of onions if the rest of the food supply is intact. Thus any government official rushing in to intervene in a cornering of the onion market will look a little foolish and thus think twice about it. If someone tried to corner the wheat market the government is likely to step in, confiscate his goods and pay him a fair price for his wheat which will be much lower than the cornered price. The cornerer will then lose money. I suspect the congressman that passed the legislation did his research and talked to all potentially affected parties. I suspect the farmers and ranchers producing the other traded commodities said that this was not really a concern for them and that they would prefer that their commodities continue to be traded.
- rafterydj 6d agoWait a minute, are onions just condiments to people? You can cook a ton of different dishes with onions, I was thinking about the many recipes I've tried for onion soup.