His onion futures scheme made him $8.5 million. That is the equivalent of $87 million in today’s figures. While the traders were crying, it was tears of joy for Kosuga. They were stuck with onions of no value, and many of them were dumped in the Chicago River. The mesh bag they were stored in cost 20 cents to put that price into perspective.Īll the traders who had taken a long position - i.e., agreed to buy onions from Kosuga at $2.76 a bag had lost a bundle. This ridiculous oversupply of onions drove the price down to just 10 cents a bag. It appeared that onions had invaded Chicago. This gave the impression there was a never-ending supply of fresh onions arriving in the city. To do this, he would ship out any old onions, wash and repack them and then them back to Chicago. Not content with having onions blocking all Chicago transportation, Kosuga wanted to give the illusion there was a never-ending supply. There were so many of them that the loading docks were full of 50-pound bags of onions, and boxcars loaded with onions filled the railyard. He began flooding the Chicago market with his onions. In March of 1956, Kosuga started the second part of his scheme. It was now time for the next part of their plan. At the same time, the duo began selling their onions on the futures market - taking a short position in order to lock in their profits. With a monopoly over onions, Kosuga and Siegel could set the price, and they raised the price of onions to $2.75 a bag. There were so many onions it took 928 carloads to transport all the onions to Kosuga’s farm in New York State. Kosuga had to build a warehouse to hold the 30 million pounds of onions he now owned. They accounted for 20% of its trades, and the two men owned 98% of the available onions in Chicago. Soon the two men had cornered the onion market.īy the winter of 1955, onion futures contracts were the most traded product on the Chicago Mercantile Exchange. So he partnered up with a futures trader in Chicago, Sam Siegel, and effectively entered into contracts with onion farmers to buy their onions. Kosuga wanted to control the price of onions by buying as many future onions as possible. The buyer of the future product is said to be the long position holder, and the selling party is said to be the short position holder. Initially, futures were used for agricultural products but now can apply to financial products, shares, foreign currency, and interest rates. A buyer and a seller agree on a contract price for an item at a future date. Back to the futuresįutures contracts are made in an attempt by producers and suppliers of commodities to avoid market volatility and lock in prices. To achieve this, he needed to manipulate the futures market. He wanted to own the onions other farmers grew. This onion farmer wasn't satisfied with just owning the onions he personally grew. He wanted to be an onion mogul - controlling the entire onion industry in the United States. Kosuga wanted to be more than an onion farmer. It was 1955, and Vince Kosuga was an onion farmer in New York with an audacious plan. Never has there been more interest in the onion. In 1958, they enforced an act to prohibit trading in onion futures on commodity exchanges. However, unlike BitCoin and GameStop - and pretty much any investment you can think of, the price of onions was manipulated to such an extent that the U.S. Onions have also made people millionaires and cost them their houses. GameStop shares went through a period of insane rises and drops thanks to an inspired group of Reddit enthusiasts. But onions may not be the odd one out for the reasons you think.īitCoin has made - and lost - fortunes and has led to a bandwagon of crypto evangelists. I’m assuming seeing I gave a massive clue in the headline, you all answered correctly and said onion.
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