A Wheat Tale:
J.M. Keynes, the eminent economist of the first half of the Twentieth Century was not only a policy wonk, but a pretty good speculator as well. Here's one example:
One fact (out of hundreds) that I didn't learn in school regarding Keynes was that in addition to being the leading economic thinker of the 30's and 40's (d. 1946) , was that he was an active speculator in commodities. He initiated a position in wheat futures in the Chicago market in early 1937, (trading from his home base of King's College, Cambridge). Soon the action took him into the Buenos Aires market as well. As luck would have it, his positions went under water and Keynes decided to take delivery of the wheat he had contracted for. As the ships steamed up the Thames and into London. Keynes was spotted measuring up the King's College chapel for use as a temporary grainery! He discovered that it was too small by half. You see, at the time Keynes owned the equivalent of a one months supply of wheat for all of Great Britain. Well, when the first of the ships docked, Keynes met the seller's representative to inspect the grain. Keynes claimed, and was subsequently proven correct, that the grain was not clean. (The standard test was to count the number of weevils in a cubic foot of grain, a tally over 30 weevils meant rejection.) So for the next month, the sellers agent directed day laborers in the removal of weevils from the wheat. At about the third week, a stockbroker who happened to be a member of the Tuesday Club (of which Keynes was the Secretary), and privy to the machinations of Prof. Keynes, ran into one of England's largest millers. The flour man complained bitterly about some "damn speculator" who had cornered the wheat market. The broker kept his mouth shut, but reported back to Keynes. Indeed, prices moved up sharply and Keynes made a tidy profit when he finally released the grain onto the spot market!
Sort of reminds me of the clever maneuvers that put the California energy market into the hands of day traders.
For more on Keynes, the curious reader may wish to visit this URL:
Subject 32716
Best, Ray :) |
