The sun has set, but no one is writing poetry. The wheat short squeeze has successfully

Chapter 397 The sun has set, but no one is writing poetry. The wheat short squeeze has successfully ended.

2:30 PM.

New York, James Keane's office.

Keane has calmed down from the excitement and frenzy of placing the order.

After the market opened in the afternoon, wheat futures prices were driven down to as low as 65 cents.

But soon, the market was pulled up to over 70 cents by a powerful force—even Keane's repeated orders to suppress it were ineffective.

"Tell our traders in Chicago," he took a deep breath and ordered his assistant, his tone filled with a desperate madness, "to continue adding to our short positions—I know there's a fifteen-minute time difference, but we need to keep pushing the market down, I need to crash it—the goal is to drive the price below 65 cents!"

He needs a victory, even if it means taking a huge gamble to cover up his current insecurity and prove the correctness of his rights!

Just five minutes ago, his assistant told him, "Sir! Our margin has been exhausted, and we cannot open any more positions!"

"Leveraged opening, wasn't the leverage tenfold on the day?" Keane roared, slamming his fist on the table, spittle flying in the afternoon sunlight.

"That's the problem—" the assistant said helplessly, "—we've used up all the leverage!"

Keane's arm, which was waving in the air, froze instantly.

After thinking for a few seconds, Keane plopped down in a chair, leaning wearily against the backrest, his face ashen.

"You can go now—well, close the door, I want to be alone for a while. Tell me the wheat market results after 3 o'clock!" Keane waved his hand.

After staring blankly at the ceiling for a while, Keane lit his pipe and fell into a long silence.

He extinguished the pipe without taking a single puff.

One minute left.

Keane forced himself to pick up the Boston Globe from the table, trying to find calm in the words he read.

However, the headline of that article, "Railways, Futures, and the Death Spiral on Wall Street!" struck him like a bolt of lightning, instantly plunging Keane into an unspeakable rage. Yet, he still read it word for word—

"As a grain train slowed down in Ohio due to aging tracks, a bloody battle of capital was unfolding on the Chicago Mercantile Exchange's price boards. The railroads, the steel artery of the American economy in this century, had become a victim of Wall Street's greed."

Over the past decade, the U.S. railroads have averaged 1.4 derailments or even more serious accidents per day. When capital prioritizes efficiency over safety, the vulnerability of the railroad system becomes the most uncontrollable variable in the futures market. A single derailment, a strike, or even a blizzard could prevent millions of bushels of grain from arriving at delivery warehouses on time.

With each line he read, Keane felt as if his heart was being ripped apart. He had initially read with a strong urge to refute, but now he only felt a dryness in his throat—

"When Wall Street short sellers bet on a decline in wheat prices, they assumed a perfect premise: that the harvested grain would always be delivered to the delivery warehouses on time by rail. However, in reality, due to the continuous decline in the efficiency of rail transport, a large amount of high-quality wheat that meets the delivery standards is stuck en route."

At this point, a fatal divergence occurred in the futures market—prices continued to fall due to short selling pressure, but deliverable physical warehouse receipts became extremely scarce due to transportation delays.

The journalist who wrote this editorial was completely unaware that the September wheat contract had nothing to do with railroads. However, their explanation based on railroads definitively revealed the risks of this speculation.

"—Even more frightening is that leverage amplifies panic. When price fluctuations reach the margin limit, market makers will force traders to add capital—from one dollar to five dollars—or they will be forced to liquidate their positions."

In order to raise cash, institutions holding short positions were forced to sell other assets, which triggered a chain reaction of sharp declines in the stock and bond markets.

And all of this, in turn, exacerbates the liquidity crunch in the capital market —

Keane could tell that the journalist who wrote this article was deliberately showing off his financial knowledge. If he had read this article under normal circumstances, Keane would have dismissed it long ago.

Until that line of text appeared —

"The market never rejects anyone's money, whether it's buying or selling, but it only rewards one type of person: those who can sense the deck beneath their feet is tilting and dare to climb higher—those who seek justification for wrongdoings are closer to the abyss than those who commit the wrongdoings themselves!"

Looking for reasons?

Keane's pupils contracted sharply. This sentence, without metaphor or imagery, was like a stark white searchlight, illuminating all the dark, self-deceiving corners of his mind that had been swirling within him for the past few hours—

"I'm not stubbornly resisting; I'm upholding the dignity of the elders of the Wutong Association."

"It's not that I misjudged the trend; it's that Livingston used underhanded tactics. I need to use my power to correct this injustice."

"Closing our positions and admitting defeat now would come at too high a political cost. It's better to increase our bets and take a gamble to turn the tide!"

"Using special privileges to quickly register warehouse receipts is merely a technical measure aimed at stabilizing the market."

Every reason it uses to soothe anxiety and convince itself to continue taking risks instantly sheds its veneer of rationality before the sentence, "To find reasons for wrongdoing is closer to the abyss than to commit the wrong itself." These are all fig leaves for fear, catalysts for greed, and spells of self-hypnosis!

"Thump, thump—"

Keane could now clearly hear his heart pounding, but even clearer was the sharp sound of countless reasons in his mind shattering like glass.

Cold sweat seeped out silently, instantly soaking my entire body. It brought a feeling of suffocation and icy cold, like drowning.

Keane suddenly realized that for the past few hours, he had been meticulously and actively digging into this abyss, and had even found a "legitimate" excuse for every shovel he made!

"No! Stop!" Keane stood up abruptly and shouted towards the trading room next door.

The assistant scrambled in, and upon seeing Mr. Keane's deathly pale face and bizarre movements, turned ashen-faced. "Sir? You—"

"Instructions—Instructions for the afternoon—" Keane turned around abruptly to look at him, his gaze just moments before fixed on the wall.

Keane stared blankly at his assistant, as if realizing for the first time what instructions he had given that afternoon.

The assistant swallowed hard and replied with difficulty, "The last batch of orders—we've just confirmed the receipts, and they've all been executed. Market closed—sir!"

Keane's hand remained frozen in mid-air, still in that comical pose of trying to cover something.

Then, as if all his bones had been removed, he slumped backward, sinking deeply into the high-backed chair.

The closing bell echoed in the distance.

It's 3 PM, time for the market to close!

The abyss had been dug. And he had only just realized that he was not only the digger, but also the first and only person to jump in with perfect precision.

The proverb in the newspaper was the last and most perfect excuse he found for his foolish behavior. It accurately predicted that the search for excuses itself is the final death knell.

"Sir, I can go back and check now, and then I'll tell you the final closing price of wheat—"

The assistant cautiously asked for instructions.

"No need—oh! Thank you. I think, hehe, oh, I'll just be alone for a while."

After calming down, Keane, one of the most famous writers in contemporary America, quickly regained his rationality.

He laughed, not out of madness, nor out of reluctance—but as he had experienced countless times before, in the fleeting moments of bankruptcy and sudden wealth, once again becoming indifferent.

"Mr. Livingston, I really look forward to meeting you!"

Afterwards, Keane stood by the window until late, watching the sun set in the west and disappear into the Hudson River and the mountainous landscape. The sunset was especially beautiful tonight! It was just a pity that he had never noticed such a beautiful view before!

What's even more regrettable is that the sun has set, but no one has come to write poetry!

9月28日周三下午3点，芝加哥商品交易所的9月小麦合约，最终收于92.75美分。

On Thursday, futures prices broke through $1, eventually closing at $1.05.

On Friday, short sellers who lacked delivery capabilities forced themselves to close their positions, causing wheat prices to open higher and continue rising throughout the day, eventually closing at $1.23.

This price held special significance for Larry because, after returning from the betting house in St. Louis, he saw a short-term trading opportunity on Saturday.

That day, upon hearing the news of a settlement to the workers' strike, the futures market opened sharply lower at $1.18, then plunged to $1.08.

At Larry's behest, Matthew executed a precise bottom-fishing strategy, and the price ultimately closed at $1.23 that day.

That day, the market executed a perfect V-shaped bottoming-out and rebound, and Larry made a total profit of $4.1 across his three accounts, a short-term windfall.

In September, wheat prices also completed a similarly perfect V-shaped bottoming-out and rebound in the last 20 or so trading days after Larry arrived in Chicago.

The difference is that Larry earned far more than $4.1 this time.

After this battle, Larry Livingston's name resounded throughout the Midwest, and all ordinary farmers believed that only "Mr. Livingston the kindest man" was the most admirable good man.

However, Larry Livingston's name wasn't particularly well-known within the futures and trading industry. This was because the unprecedented "bumper year short squeeze" was orchestrated by an anonymous institutional seat and a dozen or so smaller accounts.

Behind these accounts stands Illinois’s incoming governor, Altgirde.

Similarly, the Chicago Mercantile Exchange has already reached that inevitable conclusion—the short sellers are no longer able to operate normally.

The contract was fulfilled because the shortfall was simply too large!

At this point, the exchange's standard procedure is that if the short seller is unable to deliver sufficient cash or physical goods by the settlement date, the exchange will formally declare the short seller in default and then freeze their account, using all of the short seller's margin to offset the long seller's profits.

If the short seller is still insolvent after closing out their position, the liability for the debt will be traced back to the short seller or the institution itself.

At the same time, the exchange may activate a liquidation fund, with all members sharing part of the losses.

But the problem now is that the scale of the defaults far exceeds "normal operations"!

Therefore, when the scale of defaults is huge and may trigger systemic risks, the Chicago Mercantile Exchange must take proactive measures to protect itself and maintain the existence of the market.

On October 5th, after the last delivery day for September wheat, the Chicago Mercantile Exchange held an emergency board meeting. The meeting reached two conclusions:

First, a uniform "settlement price" is designated, and all open contracts are subject to mandatory cash settlement.

This effectively negates some of the vested profits of the long positions, but avoids the collapse of the entire settlement system.

For Livingston, this means he won't be able to cash in all his profits at $1.23, and his gains will be significantly reduced, but the wealth is still astronomical.

The exchange's second measure was to suspend futures trading for all contracts for ten days. A special investigation team was also dispatched to "investigate whether this transaction was reached under extremely unfair conditions. If such signs are found, some contracts will be directly cancelled or adjusted."

trade."

In 1892, exchanges had considerable self-regulatory power, and this seemingly domineering approach had its own logic for survival.

If the final short squeeze was indeed orchestrated by Larry himself, without the assistance of institutional accounts, there is a strong possibility that Larry will be swindled out of a large sum of money by the Chicago Mercantile Exchange.

But Larry remembered Mr. Porter's teaching: "Learn to share the spoils with your superiors, and know how to hide from your subordinates."

One strategy is to gain an advantage from superiors, remain hidden from inferiors, accumulate strength, and appropriately show weakness!

In other words, "Build high walls, store up grain, and delay declaring yourself king!"

This seemingly "disadvantageous" principle brought Larry enormous benefits at this moment, because the nominal controllers of the account were the governor and other prominent figures in the United States.

The exchange's investigation team concluded that there was no fraud in the September wheat contract, and the differences between the long and short positions were based on long-term investment philosophies; it recommended that the Chicago Mercantile Exchange facilitate negotiations between the two parties to resolve all issues.

Therefore, the exchange requested consultations with the governor. The governor and Senator Kennedy then sent an invitation to Larry to come to the Chicago World's Fair hotel on Saturday, October 8th, to discuss the final liquidation details.

However, before that, Larry needs to go to Cargill to complete his "mission" in Chicago, which is to officially join Cargill.

October 6, Cargill warehouse and offices in Chicago.

Old Cargill stood in front of the plain window of his office, his lips pursed, staring intently at the yellow leaves that began to fall outside.

Outside the window, horse-drawn carts loaded with wheat were heading to the dock after successfully leaving the warehouse.

Three meters behind old Cargill, McMillan was sitting on the sofa organizing data and reports sent from various places. He would occasionally look up at his father-in-law and shake his head slightly.

After a while, old Cargill suddenly turned around and said, "There must be a way. We can think of some ways to stop Larry Livingston from investing in our company—"

Old Cargill looked at his son-in-law with eager anticipation, but he saw no seriousness on the latter's face, only helplessness.

McMillan knew his father-in-law well enough to understand that he was reluctant to part with his company shares. Old Cargill had spent his entire life pursuing a company of his own.

"Dad, we've already settled things, and we've even signed a contract with Mr. Livingston—" McMillan replied.

"No! We can talk to him—we can borrow money to pay him as payment for this. We can pay him more—" Old Cargill raised his voice.

McMillan frowned almost imperceptibly, then stood up and said seriously to old Cargill, "Have you heard that warehouses in five cities, including St. Louis and Omaha, received an extra 48 hours of goods after the last Tuesday of the week?"

wheat----"

Old Cargill nodded blankly. "I know, but so what?"

“Human nature!” McMillan emphasized. “Don’t you see the logic behind this? He told us to stop buying, but continued to buy wheat in five core cities in his own name—do you know how high his reputation is among the farmers now?”

He announced to the farmers back then that the Cargill-Livingston Company would be established. Now, if you wanted to cheat him, I don't know if you'd believe it, but with just one sentence, he could make Cargill harvest half less grain the following year!

Old Cargill looked bewildered.

"Don't forget—we owe the farmers all the money for their grain. If you try anything funny with him today—he might just disappear tomorrow."

McMillan, his face solemn, took a half-step forward and continued, "Livingston is a terrifying man—meticulous and meticulous in his work. Didn't you see his phenomenal maneuver at the Chicago Mercantile Exchange? He pulled off a perfect short squeeze this year, with its bumper wheat harvest—you should be grateful he helped us, that he stood with us."

"But, but—"

Old Cargill wanted to argue, but his mouth was open and he couldn't utter a single word.

“I know you care about Cargill’s business and don’t want outsiders to take a share of it—” McGmierle comforted him, “but, Dad, you have to understand that he’s still young, and he has a long life ahead of him. For the rest of his life, we can only be his allies, otherwise we’ll not only lose Cargill’s shares—we won’t even know how we died.”

Old Cargill understood this perfectly well. But the thought of Larry taking away his life's work without a word was like a knife twisting in his heart.

Just then, there was a knock on the door. Larry had arrived.

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