Why Trading Onions on Financial Markets is Illegal #Finance

This CashNews.co was made possible by, well, me, and the streaming site I helped start, Nebula. Right now, if you buy any of our merch at Standard.tv/HAI, you’ll get 30 days of Nebula for free. Today’s episode is about the future of onions. Now, I’m no expert on where onions are

headed, but here are my top 50 theories. One: Wi-fi. Two: new hairdos. Three: gunions—onions that looks like guns. Four: munnions—onions that look like Olivia Munn. Five: lemons get rebranded as “sour onions.” Six—oh wait sorry I’m being flagged by one of my Junior Interim Executive

Researchers in Training for the EMEA region. It seems that this CashNews.co isn’t about the future of onions, it’s about onion Futures. My bad. Let’s try again. Meet Vincent Kasuga. He’s known by many names: his fans call him the Onion King, onion farmers call him a

cheater, friends call him Vinny, and his wife calls him cuddlebuns, but that’s only in private. In the 1950s, cuddlebuns had a brilliant idea: what if we took shorts, but made them longer? It turned out that was called pants, and it had already been invented, but then he had another idea: he was

going to corner the onion market. Now, in theory, cornering a market is simple: Step one: buy all of a commodity. Step two: stonks. Step three: Profit. In practice, though, cornering a market is nearly impossible: not only would Vince need to buy almost every onion in America, he

would also need to do it without anybody noticing, because if the market realized what he was up to, prices would spike before he could finish. Somehow, though, by the winter of 1955, using a combination of quiet investors, ramshackle warehouses, and the god-like high of abusing

Capitalism, he managed to secure 98% of America’s smelly apples that make you cry. But that was just the beginning. You see, Vince wasn’t content just to own all the onions that currently existed—he also wanted to own all the onions that would be grown in the future. While

buying onions from the future may sound like ramblings of a coked-up Hamburglar, it’s actually totally possible, through something called a Futures contract, which is, in simple terms, an agreement to buy something in the future at a price that you set now. So, Vinny bought up

all the onion Futures, making him the owner of all current and future onions, a position commonly called Total Onion Domination. Now you might be wondering: okay, so what? He owns all the onions, what’s the worst he could do: make fajitas? But the thing is, when someone owns the

entire supply of a given market, they have complete control over the price. It all comes down to basic supply and demand—if you’ve ever taken an Econ 101 class, you’ll remember supply and demand as the system that helped determine the price of Econ 101 Exam Answers on your uni’s black

market. The concept is simple: when there’s less supply of something, prices go up, and when there’s more supply, prices go down. In a well-functioning free market, supply is determined by a combination of competing firms, but in this case, thanks to his Total Onion Domination, onion supply was

set by one person: Vincent “Cuddlebuns” Kasuga. Simply by changing how many onions he was willing to sell, Vincent could make the price whatever he wanted it to be: 4 dollars and 20 cents, sixty-nine dollars, or probably other numbers, too. The first part of Vince’s scheme was exactly what

you’d expect: he artificially raised the price of onions, and then sold them for a Profit. In late 1955, he gathered all the big players in the onion game—onion buyers, onion growers, even Charles P. Onion himself—in a conference room in Chicago, and basically gave the

following presentation: “Good afternoon, idiots. I own all the onions. Buy them for the price I want or have fun trying to sell grapefruits.” And it worked: he sold 9 million of his onions at the high price he had set. But much like an onion, Kasuga’s plan had layers—and for his second

scheme, he quietly began to short onion Futures. To explain what a short is, here’s Margot Robbie—I mean, Thomas Frank—in a bathtub: “Hi Sam. Basically, when Vincent Kasuga shorted onions Futures, he was betting against them, meaning that if the price of

onions went down, he would make money. But of course, it wasn’t really a bet, because Vince knew the price of onions would go down, because as the owner of all of America’s onions, he controlled the price. Got it? Good. Now get out of my bathroom.” Thanks Thomas. Once Vince had solidified his

short position, he flooded the market, increasing the onion supply so much that the prices for a 50-pound bag of onions fell from about $2.45 to 10 cents, which if my math is correct is… carry the one, move the decimal, math math math… way less. In fact, the onions cost less than the 20-cent

bags they were put in. In other words, onions became more worthless than my joke-making abilities—they were valued so little that traders literally couldn’t give them away, which they actually tried to do, handing onions to orphanages, hospitals, and schools, until eventually they were forced

to dump the remaining ones in the Chicago river, finally getting rid of them while also setting the world record for the largest and worst French onion soup ever. Thanks to his shorts on onion Futures, when prices tanked in 1956, Vincent Kasuga made $8.5 million, which today would

be $83 million—an amount accountants refer to as “much.” But the onion price cut led to tears from onion farmers, who ultimately managed to lobby then-congressman, later-president, and man who looks like an oil barren trying to steal the Muppets’ theatre, Gerald Ford, to introduce the Onion

Futures Act, which Congress passed in 1958, banning onion Futures from ever being sold in the United States. Today, onions remain the only agricultural commodity on which Futures are banned, which actually has real implications for onion farmers,

who can no longer sell their future crops now at a guaranteed price, which leads to a more volatile market, and more price uncertainty. But I do have good news for them: if they’re looking for price certainty, I can guarantee that an HAI sticker costs three dollars now and will cost three dollars

tomorrow, and if you buy one, you can try out Nebula for free. You probably know by now that Nebula is a streaming service that I started with my other educational creator friends to help us make the kind of content we want, without having to worry about the YouTube algorithm or demonetization or

ads. Plus, on Nebula, you’ll also be able to see exclusive Originals you can’t see anywhere else, including the HAI Original The Brick Façade, and the relaunch of my podcast Showmakers, where Brian from Real Engineering and I interview other creators. Right now, if you purchase any HAI

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