The Onion has no future(s)

No, not This Onion.

‘‘For as long as we fail to treat speculators the way they deserve—with a bullet in the ead—we will not get anywhere at all.’’
Vladimir Lenin
‘‘For my part, I wish every one of them [speculators] had his devilish head shot off.’’
Abraham Lincoln

Who knew the two notable leaders shared opinions on anything? Both are cited in a wonderful paper from David S Jacks. Here’s the nub of it:

The fundamental result of this paper is that futures markets are systematically associated with lower levels of commodity price volatility. The means for arriving at this result is a series of quasi-experiments with futures markets provided by history, namely their establishment as well as prohibition through time.

One of the excellent discoveries: onion futures trading was banned in the US with effect from 1959. Here was the result:
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This was brought to my attention by my colleagues Javier Blas and Joanna Chung. Tomorrow’s FT Magazine will contain my own thoughts on speculators, which are broadly in agreement. Alas, I didn’t know about Jacks’s work when I wrote the column.

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