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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
onions onions that look like guns four
munyons onions that look like olivia mun
five lemons get re-branded 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 video 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 vinnie and his wife calls him
cuddle buns but that's only in private
in the 1950s cuddle buns 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 the 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 godlike
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 the 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 vinnie
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 can 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 cuddle buns casuga
simply by changing how many onions he
was willing to sell vincent could make
the price whatever he wanted it to be
four dollars and 20 cents 69 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 price
he had set but much like an onion
casuga's plan
had layers and for his second scheme he
quietly began to short
onion futures to explain what a short is
here's margaret i mean thomas frank
in a bathtub hi sam basically when
vincent casuga shorted onion's 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 off thanks thomas
once vint 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 and 45 cents to 10 cents
which if my math is correct is
carry the one move the decimal 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
casuga made 8.5
million dollars 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
baron trying to steal them up its
theater
gerald ford to introduce the onion
futures act which congress passed in
1956
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 hii sticker costs
three dollars now
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