Wednesday, October 9, 2013

A Corner In Wheat (1909)

Based on the huge novel The Pit by Frank Norris about the CBOT in it's early and heady, super unregulated days in the late 19th century.  "Cornering" means hording of contracts to buy or the hording the physical commodity itself--essentially it's hostage taking.  If anyone has seen Trading Places (which is really a kind of remake of this, based on the novel turned comedic--brilliantly so, then you will have an idea how this works).  This is precisely why markets need regulation.  Without regulations, market are not really free.  What big bankers mean by screaming for deregulation is that they want to be free to game the system anyway they can...and when you have big bucks to spend, in the age of technology, those ways can be almost endless.  Right now, for example, big banks are actually cornering physical commodities...buying them up and selling them for the price they set--this is especially true for the metals markets...  So over at Scare Me On Fridays we are celebrating the Countdown To Halloween and waiting impatiently for the government to reopen by viewing a few thrillers based on the financial industry.

No comments:

Post a Comment