The tide of public opinion shifts, Wednesday marks the start of a short squeeze and mass

Chapter 394 The tide of public opinion shifts, Wednesday marks the start of a short squeeze and massacre.

On Wednesday morning, before the Chicago sun had fully risen, the hoarse cries of newsboys pierced the tranquility of the neighborhood, like a string of lit firecrackers waking the still-sleeping city.

"Breaking News! Breaking News! Who is sucking the blood of ranchers dry on the front page of the Chicago Tribune?"

"Read the news! The Chicago Tribune—Bumper wheat harvest, overflowing granaries. Why are farmers still going bankrupt? Unveiling the secrets behind food pricing!"

Two local newspapers with different backgrounds and usually different stances are both exposing the "behind-the-scenes manipulators of farmers' suffering."

Meanwhile, the Boston Globe, a newspaper popular in Massachusetts, also published a seemingly neutral editorial titled "Railways, Futures, and the Death Spiral on Wall Street."

Although this newspaper couldn't influence Chicago, it was quickly brought to New York City by over a dozen Democratic media outlets across the East Coast, generating public opinion—

Larry saw two Chicago newspapers during his breakfast.

The Chicago Tribune's report was very somber.

"The Curse of Harvest: When Wall Street's Gambling Becomes a Noose for Midwestern Farms"

"Our investigative team has been tracking this for weeks—this year's U.S. wheat harvest is unprecedented, yet since August, wheat prices on the Chicago Mercantile Exchange have mysteriously plummeted, currently down nearly 8% compared to the same period last year."

Ironically, this contrasts sharply with the fact that farmers live in poverty—their lives are insufficient to cover basic living expenses.

"————It is reported that several anonymous speculative accounts from New York have established massive short positions in the Chicago market since the summer."

—Evidence suggests that this capital is attempting to disrupt the physical delivery process, intending to further depress prices when futures contracts expire, thereby realizing bloody profits on the countless bones of farmers.

"—This is not normal fluctuation in a free market, but a premeditated financial hunt. While Kansas farmers are forced to use wheat as fuel, and Minnesota ranchers are forced to sell their produce at far below cost, some trading rooms in New York are raising a glass to yet another crash."

The gold or silver standard is not the core issue. The core issue is: who granted capital the right to so wantonly plunder producers?

After reading it, Larry felt the fighting power of American liberal arts students at that time.

The report did not name names, but it subtly shifted the narrative of farmers' bankruptcy from the flaws in the monetary system to the plundering by Wall Street capital.

It's easy to guess that the governor used his media power to quietly turn the debate over the gold and silver standard into a greedy suppression by Wall Street.

This would both change people's perception of the People's Party and align with the Democratic Party's consistent political slogan of "suppressing Wall Street capital."

This is also what Kennedy repeatedly emphasized to Larry: the political demands of the Democratic Party in an election year.

Another Chicago News article cleverly separated the policies of the People's Party and the Democratic Party, and directly pointed to financial capital in specific events.

"Mr. Weaver shouts for the freedom to mint silver coins, but can silver coins stop Wall Street's freighters? Can they fill the delivery warehouses?"

No! The ones who truly protect you are the industrialists who quietly purchase high-quality wheat and register warehouse receipts in advance.

The Democratic Party warns: Beware of those who simplify complex issues into a gold and silver war; the real enemy is the financial conspiracy group hiding under the sycamore tree!

Larry finished reading the newspaper, tossed it aside, and continued eating his breakfast.

The media attack was pre-arranged between Larry and the two Democratic leaders. Kennedy instructed Larry to adopt a pre-emptive attack stance so they could shift the blame to Wall Street—since Wall Street leans towards the Republicans anyway, and they don't care about such accusations.

On the other hand, such accusations also benefit Larry's subsequent short squeeze plan. While public opinion cannot change the short positions and direction, it can greatly influence the mentality of local grain traders and investors.

Larry didn't expect moral support, but it was better than nothing.

However, the Chicago News revealed something even more crucial for local traders: the number of high-quality wheat warehouse receipts available for physical delivery registered on exchanges is far less than the size of futures contracts.

Furthermore, the report thoughtfully provided a vivid explanation, as if afraid that ordinary people wouldn't know.

"It's like a theater selling far more tickets than it can hold. Those who sell the tickets (futures short positions) may never have intended or been able to provide seats (physical wheat). Their profit model is based on creating panic and triggering a stampede to liquidate positions, rather than any actual economic contribution. We call this phenomenon 'paper harvesting'."

This is very important because this report reveals the most important logic behind this futures battle: the short sellers don't have enough wheat to deliver, so they have to accept any high price!

This is the kind of reporting that truly matters to Larry.

Larry could imagine what the insiders would think when this news reached the exchange.

The most interesting part of this story is that Larry Livingston was actually the "mastermind" who manipulated wheat prices from the very beginning, but after the news reports cleverly edited the facts, Larry became a "businessman who quietly bought wheat."

This affirms and promotes Larry's achievements in terms of public opinion, and also provides a righteous endorsement for Larry's subsequent actions.

Larry was particularly struck by this point—the two reports, without a single lie, portrayed Wall Street capital as the enemy of Midwestern farmers while presenting themselves as saviors.

That's the power of the media!

Larry thought that when he had money in the future, he should also acquire a few newspapers or something to create a platform for public opinion.

After all, in a country with freedom of the press, the media possesses the right to supervise public opinion, and its influence is supreme. However, how the media specifically...

You have to listen to the boss, though.

But that's a story for another time.

After finishing his meal, Larry leisurely walked to the telegraph room, sent a telegram to Baruch in New York, and then went to the stock exchange to prepare for today's trading.

Thirty minutes later, Baruch of Reading received a telegram from Chicago.

Baruch had been anxious for a long time; he was acting as Larry's agent for wheat futures trading in New York.

Yesterday's drop was truly terrifying; the account has been hovering around the margin call level, and Baruch has received several margin calls from Lehman Brothers.

Fortunately, the futures account wasn't liquidated, but it was very close. Baruch was unsure whether he should use capital from Larry's stock account to pay the futures margin.

But this is a matter that Larry can decide.

Baruch sent several telegrams to the hotel where Larry was staying, but they all went unanswered.

Receiving Larry's telegram today felt like a long-awaited revelation to Baruch—

When Baruch opened the telegram, he secretly hoped that Larry could tell him whether the losing positions should be liquidated or margin calls should be made.

After all, a dignified retreat is always better than a complete defeat.

But after reading the telegram, Baruch was stunned! The telegram read: "If the market moves upward, add to your long positions with all your might!"

This telegram actually ordered him to attack?!

Baruch found it inexplicably absurd that Larry was telling him to increase his position when wheat futures prices had fallen from Monday’s high to 55 cents.

How is that possible?

It was almost 9 o'clock when Baruch entered the trading room with doubt and anxiety. The price quote machine from Lehman Brothers was already clicking and spitting out the futures market prices.

Baruch hurriedly grabbed the paper strip, and from it he saw that the first transaction price for wheat that day was 60 and 1/2 cents!

Good heavens! Prices actually rebounded, and at such an exaggeratedly high opening.

Baruch could hardly believe his eyes. After all, the downward trend in wheat futures was clear, a trend that everyone on Wall Street could see.

But today, when Larry suggested he could increase his position, wheat prices actually rebounded!

Prices can rise or fall in an instant!

How did Larry Livingston manage to do that?

Let's go back a little earlier to Chicago.

The atmosphere at the Chicago Mercantile Exchange before the market opened was completely different from that on Tuesday.

Traders gathered together, no longer simply discussing market trends, but excitedly waving newspapers and arguing about the veracity and impact of the reports.

"See that? They're talking about the fleet at the port! Who could that be?"

"Of course! Massive short positions, New York accounts, who else could it be?"

"Damn it, these bloodsuckers—I almost got my account wiped out yesterday too!"

"Do you think—that Chicago businessman who rebelled against Wall Street—could be—Livingston?"

"Shh—keep your voice down. But look at what he did yesterday, buying even after the price had fallen so much—"

"If the report is true—the short sellers might not be able to produce that many warehouse receipts for delivery! Then the price of wheat—"

At this point in the traders' conversation, everyone looked at each other in bewilderment—the answer was actually self-evident: if the short sellers really had no wheat available for delivery, then the market would not be on the short side, but would instead turn upwards and force a short squeeze!

But the traders were also uncertain, because a lot of data on the Chicago Mercantile Exchange was confidential at this time, and the exact delivery data would not be available until the last trading day.

Once a seed of doubt is planted, it will quickly take root and sprout.

The panic began to subtly shift.

The short-selling camp, which was riding high yesterday, is feeling the invisible pressure today. Some smaller short-selling accounts are beginning to waver; they aren't afraid of public pressure, but they are truly afraid of running out of ammunition in their short-selling pistols.

Now, in the trading hall, almost everyone's eyes are focused on the opening price—because that price will determine who is lying and who has more confidence, the bulls or the bears!

Everyone had only one thought: whoever wins, I'll help them!

Five minutes before the market opened, Larry stood in front of the railing on the second floor of the exchange, with Matthew and the head of the institutional account—the old trader—standing beside him.

Larry leaned on the railing, his hand familiarly touching the metal bolt on it, listening to the commotion in the trading pool below, mixed with discussions about the "Wall Street conspiracy."

He knew that the tide of public opinion had already been set in motion, and now it was time for the tsunami of capital to catch up!

Larry smiled and turned to the veteran trader, instructing, "Use 1000 lots to push the opening price above 60 cents!"

The veteran trader looked bewildered, wondering if he had misheard. "—You mean using 1000 lots? At market price?"

"No need for market price! Hmm, let's just place it at 60 1/2 cents, and sweep up any short positions below that!"

"This—this is against the rules, Mr. Livingston! You've opened the market with such a high price; if the price drops, these 1000 lots will immediately incur huge losses!"

Larry waved his hand, "It's okay! Just do as we say! Those onlookers in the market need confidence right now, so let's give them some confidence."

Matthew interjected, "But what if that big short seller also dumps a huge amount of shares? He should have the financial capacity for that. If he swallows your 1000 lots and drives the price down, he can immediately force some long positions to close out—"

"So we need to give him confidence!" Larry nodded in approval of Matthew's thorough consideration, and continued, "Besides, the short sellers might not have that much guts. First, they know their cargo ships haven't registered many warehouse receipts in a day and a night; second, they're far away in New York, how could they dare to place orders as soon as the market opens like I was here? They'll definitely observe for a while before making a decision—being too far from Chicago to launch a full-scale offensive is their fatal weakness."

Larry's words made both of them nod silently.

"But what if 1000 lots aren't enough?" the veteran trader asked again.

"It's simple! Just add another 1000 hands!" Larry said casually.

When the opening bell rang at 9:60.5 AM, the price did not continue to fall as the bears had expected. Instead, a consortium of unfamiliar traders joined forces to push the opening price up to 60.5 cents!

In fact, the process of sweeping up the short positions was much easier than the veteran trader had imagined. It only took a little over 200 lots to sweep up all the short positions below 60.5 cents in the September wheat futures contract!

Larry is right. The other side doesn't dare to dump large amounts of shares before the market opens because they have a twenty-minute time difference!

The opening bell at 9:00 AM shattered not only the silence, but also the last glimmer of hope for the short sellers.

September wheat at 60.5 cents!

This price caused a strange, half-second freeze in the entire trading pool.

"It opened nearly 6 cents higher than yesterday's closing price! Good heavens—"

A short-selling broker who was aggressively selling yesterday froze in mid-air, his voice trembling as he cried out.

This outrageously high price caused a stir in the trading hall, and the traders instantly understood the true direction of the market.

What the newspapers said is true! There simply isn't enough wheat available for delivery on the market!

Therefore, the short sellers simply cannot continue to suppress prices; they have no "seat" to do so!

The wheat futures market in September will become a one-sided short squeeze!

These thoughts may seem numerous, but they are actually just a matter of a single thought among people.

The deathly silence was then shattered by an even more violent roar.

The moment they saw the opening price, panicked short sellers rushed to close their positions, while long brokers eagerly handed their orders to the floor traders.

A feast of slaughtering short sellers has begun!

Inside the trading pool, floor traders began shouting and yelling. Wheat futures prices first saw a brief period of concentrated trading around 62 cents, and then skyrocketed.

The short sellers were a beat too slow to react. Their thinking was still stuck in the "myth" of yesterday's plunge and the arrival of ships in port.

Several major short-selling brokers instinctively glanced at the New York brokerage firm that had dumped shares yesterday. The latter also looked ashen-faced, seemingly having never expected such an outcome.

But he had not received any instructions from New York and was powerless to stop the sudden rebound in the market.

Prices, like wild horses breaking free of their reins, began to surge upwards.

62 and 1/4!

62 and 1/2!

63 cents exactly —

Each breakout was accompanied by larger buying and slightly less resistance. The bears were experiencing a collective cognitive dissonance.

"There's clearly so much stock available! The ships are right at the dock!"

But what about the warehouse receipts? The newspapers say they might not be able to deliver the goods at all!

"How could there be a short squeeze in a bumper harvest year?"

But prices are skyrocketing, and the buying interest looks incredibly strong!

"This is definitely a trap, a ploy to drive up the price so the bulls can escape!"

But the buying voices are getting more and more mixed, not like one or two major players trading against each other, but more like the moment when the bulls are awakening!

"—Does the short sellers really not have enough wheat for delivery? Then who are the workers who have been constantly moving grain into the exchange's delivery warehouse these past two days working for?"

Doubt breeds hesitation, and hesitation leads to sluggish action. In the futures market, even a moment's hesitation can be fatal!

The first crack has appeared in the short-selling camp.

A medium-sized short account, thinking about the "vampire" accusations in the newspapers and the potential settlement troubles, finally gritted its teeth and yelled at its broker, "Close half—no! Close two-thirds of the position! Market close!"

His buy-to-close order became the new fuel driving up prices.

At 9:08, the price suddenly broke through 65 cents!