Insanity: Screening elements in the HV

penny wrote:I won't put words into your mouth, but you need to clarify your question. If by biggest you mean office space allocated, or groundside acreage allocated, then who knows. I don't think that is what you are referring to. But I would bet the farm that the SL’s financial center does not come close to the bottom line that is traded in the MBS at the end of each day.

House of Steel clearly states that the MBS has cornered the market on trade. How can that be true if the MBS does not have the largest trade by monetary volume? It is logical by nature. On Earth, everywhere there is a massive amount of water near a land mass, that landmass will showcase a lot of cities built around the sustaining nature of water. In those cities, the densely packed markets – stores, malls, eateries, gas stations, etc., – will always be located near intersections. Because intersections move lots of traffic. Interstate highways move even more diverse traffic. Traffic from around the country. So quite naturally, infrastructure and businesses will always see those areas of densely populated traffic as prime real estate. Lot rent prices and taxes will be higher, but the amount of business being conducted in such a busy area of town will more than make up for the cost.

The MBS has the same formula working for itself. It is a busy “interstate” junction seeing traffic from all over the galaxy. Quite naturally it will become the dominant trading post. The largest flea markets are always located near busy intersections.

I have found the relevant quote and it was briefly mentioned in your thread on whether the MBS "cornered the market". The author has specifically said that the financial area in the MBS was huge, BUT not tremendously bigger than other markets in the League. Here it is with a point to the source:

I'm not saying that the Star Kingdom completely dominates the Solarian League's financial markets or stock markets or futures markets, because it doesn't. No single star system could completely dominate an economic system that huge. But Manticore is very definitely first among equals -- by a substantial margin -- compared to the other interstellar banking centers scattered around the galaxy. It could hardly be otherwise, with such a huge percentage of the galaxy's total trade and shipping passing through the Star Kingdom. Indeed, dear readers, I suspect that you are coming to understand (if you didn't previously) why a single-system polity like the Star Kingdom was able to ram an embargo on military technology to Haven down the Solarian League's throat.

Because the author says that no single system could dominate, then it follows that no single system (including the MBS) could "corner the market".
The spillover effect from Manticore's Junction-created astrographic position

tlb wrote:I have found the relevant quote and it was briefly mentioned in your thread on whether the MBS "cornered the market". The author has specifically said that the financial area in the MBS was huge, BUT not tremendously bigger than other markets in the League. Here it is with a point to the source:

I'm not saying that the Star Kingdom completely dominates the Solarian League's financial markets or stock markets or futures markets, because it doesn't. No single star system could completely dominate an economic system that huge. But Manticore is very definitely first among equals -- by a substantial margin -- compared to the other interstellar banking centers scattered around the galaxy. It could hardly be otherwise, with such a huge percentage of the galaxy's total trade and shipping passing through the Star Kingdom. Indeed, dear readers, I suspect that you are coming to understand (if you didn't previously) why a single-system polity like the Star Kingdom was able to ram an embargo on military technology to Haven down the Solarian League's throat.

Because the author says that no single system could dominate, then it follows that no single system (including the MBS) could "corner the market".
The spillover effect from Manticore's Junction-created astrographic position

And note that he only goes on to say Manticore is first among equals in interstellar banking.

He specifically does NOT claim they're first among equals for financial markets or stock markets or futures markets -- merely that they don't dominate the Solarian markets for those.

That's enough to confirm they haven't cornered those markets -- but leaves quite unclear how they actually rank against various League financial markets or stock markets or futures markets. I would think that if they were also first among equals there that RFC would have said so; rather than narrowing that down to just interstellar banking. But that's not something we can 100% rely on.

Any higher than very much first among equals would seem to take us in the "dominate" region where we've been told they aren't.

But it leaves open the possibility that they're a significantly smaller player in those other financial, stock, future markets for the League than they are for banking.


In any case, great job digging this up and thanks for sharing it.

Jonathan_S wrote:He specifically does NOT claim they're first among equals for financial markets or stock markets or futures markets -- merely that they don't dominate the Solarian markets for those.

That's enough to confirm they haven't cornered those markets -- but leaves quite unclear how they actually rank against various League financial markets or stock markets or futures markets. I would think that if they were also first among equals there that RFC would have said so; rather than narrowing that down to just interstellar banking. But that's not something we can 100% rely on.

Any higher than very much first among equals would seem to take us in the "dominate" region where we've been told they aren't.

But it leaves open the possibility that they're a significantly smaller player in those other financial, stock, future markets for the League than they are for banking.
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Back into the area of trying to build a picture based on background provided in text or author's direct comments. We do get background in House of Steel among other places but also in the discussions (and thoughts) of some of the Mandarins as the impact of what Manticore in it's own defense against "normal" SL/SLN reactions are to anything that cuts down on the flow of money to the government, those who are involved in the endemic corruption etc. Stock markets are local unless they are connected and can trade financial instruments from other countries/nations etc. We have this presently on Earth where we effectively have 24/7 ability to move money or trade securities and other financial instruments as long as you are connected to the internet.

How is that accomplished? All sorts of financial companies- including insurance- have branch offices in major cities across the world. The limits on that are either political as driving by what the local government will permit & how they enforce their regulations and the profitability of those branch operations in the eyes of the company's senior management. So, again 18th, 19th, 20th century banking and merchant operations on an international scale. You either have an actual branch (with local management having executive powers) or you have a correspondent relationship with a company in the place you want to be able to transact business.
Manticore is both a trade rout hub and a financial hub. It has it's own banks and insurance companies and stock exchange which normally will have offices in many planetary locations plus space habitats/stations and there will be branch offices of other companies doing business on an interstellar level. And everybody is tied together by communications which depend on information carried by interstellar shipping. That would be dispatch boats (government or corporate/private) and merchant shipping (including passenger liners) that move between systems carrying mail and dispatches. There will be branches of Bank of New Madrid on Manticore like there are branches of Barclays Bank, HongKong and Shanghai, CityBank, etc in New York, San Diego, Chicago, London, Paris, Tokyo, Rio, Moscow, Beijing etc. Pick a major band from any country and you will find at least one branch in the capital city of other counties and major transportation hubs.
Why? Money and being able to move it and use it. If you are a merchant ship moving freight on interstellar routes you are going to need to deal with the costs of fuel, port fees, other consumables including food, payroll and repairs etc. You also need away to collect what your are owed for moving cargo and likely move most of those funds to your home office to meet requirement of things like debt service on financing for your ship, insurance coverage and paying taxes. You're not carrying chests of gold (pick precious material of choice) even if you are carrying things like Bank of New Madrid credit chips for dealing in less connected locations. You can access your /your companies account at branch banking locations either base on last update from your home office though their local connection or some variation of a Letter or Credit to provide funds.
Manticore has the Junction----its going to have at least one major branch of every major bank dealing with interstellar finance and lesser banking concerns will have a correspondent relationship that is working on an interstellar basis.
To mangle a quote ....The credits must flow.

Brigade XO wrote:
Back into the area of trying to build a picture based on background provided in text or author's direct comments. We do get background in House of Steel among other places but also in the discussions (and thoughts) of some of the Mandarins as the impact of what Manticore in it's own defense against "normal" SL/SLN reactions are to anything that cuts down on the flow of money to the government, those who are involved in the endemic corruption etc. Stock markets are local unless they are connected and can trade financial instruments from other countries/nations etc. We have this presently on Earth where we effectively have 24/7 ability to move money or trade securities and other financial instruments as long as you are connected to the internet.

How is that accomplished? All sorts of financial companies- including insurance- have branch offices in major cities across the world. The limits on that are either political as driving by what the local government will permit & how they enforce their regulations and the profitability of those branch operations in the eyes of the company's senior management. So, again 18th, 19th, 20th century banking and merchant operations on an international scale. You either have an actual branch (with local management having executive powers) or you have a correspondent relationship with a company in the place you want to be able to transact business.
Manticore is both a trade rout hub and a financial hub. It has it's own banks and insurance companies and stock exchange which normally will have offices in many planetary locations plus space habitats/stations and there will be branch offices of other companies doing business on an interstellar level. And everybody is tied together by communications which depend on information carried by interstellar shipping. That would be dispatch boats (government or corporate/private) and merchant shipping (including passenger liners) that move between systems carrying mail and dispatches. There will be branches of Bank of New Madrid on Manticore like there are branches of Barclays Bank, HongKong and Shanghai, CityBank, etc in New York, San Diego, Chicago, London, Paris, Tokyo, Rio, Moscow, Beijing etc. Pick a major band from any country and you will find at least one branch in the capital city of other counties and major transportation hubs.
Why? Money and being able to move it and use it. If you are a merchant ship moving freight on interstellar routes you are going to need to deal with the costs of fuel, port fees, other consumables including food, payroll and repairs etc. You also need away to collect what your are owed for moving cargo and likely move most of those funds to your home office to meet requirement of things like debt service on financing for your ship, insurance coverage and paying taxes. You're not carrying chests of gold (pick precious material of choice) even if you are carrying things like Bank of New Madrid credit chips for dealing in less connected locations. You can access your /your companies account at branch banking locations either base on last update from your home office though their local connection or some variation of a Letter or Credit to provide funds.
Manticore has the Junction----its going to have at least one major branch of every major bank dealing with interstellar finance and lesser banking concerns will have a correspondent relationship that is working on an interstellar basis.
To mangle a quote ....The credits must flow.

This whole conversation reminds me of the vaults in the basement of the US Fed building in New York. In the late 19th century/early 20th century, every major European country had a vault in the basement with gold and other commodities, and as trades took place between central banks, the commodities were moved from vault to vault, or placed in hold as collateral. (The vaults are still there, they were part of the plot of Die Hard 3, even if they don't hold foreign collateral).

A similar system may be in place in the Honorverse - probably digital (Bitcoin? ). Where major Financial intuitions have collateral (of some kind) in system to back any major transactions or trades until the actual commodities or currency backing the specific transaction can be transferred.

Theemile wrote:This whole conversation reminds me of the vaults in the basement of the US Fed building in New York. In the late 19th century/early 20th century, every major European country had a vault in the basement with gold and other commodities, and as trades took place between central banks, the commodities were moved from vault to vault, or placed in hold as collateral. (The vaults are still there, they were part of the plot of Die Hard 3, even if they don't hold foreign collateral).

A similar system may be in place in the Honorverse - probably digital (Bitcoin? ). Where major Financial intuitions have collateral (of some kind) in system to back any major transactions or trades until the actual commodities or currency backing the specific transaction can be transferred.

Which was in part what made Europe worse off after WWI - thanks to the gold standard. They transferred a lot of that gold from their vaults to the US's vaults to cover the dollars they'd acquired to buy war materials from US companies.

That should have led to a massive surplus of US dollars, making it expensive to export from the US and cheap to import from post-war Europe. Which should have led to that gold slowly flowing back over to the vaults of those European powers -- helping boost their devastated economies, industries, and agriculture.

But the US simply, as I understand it, decided not to realize that inflation by actually minting dollars for most of that influx of new gold. And so by causing that gold to cease circulating helped kneecap Europe's economic recovery. (Which short temp gave the US the roaring 20s; gave Europe crippling austerity; and longer term sank the entire world into the Great Depression)

International securing transactions around with physical collateral still happens but mostly it depends on a lot of things. You can still get bearer bonds -or you could 20 odd years ago but I haven't been involved with that as collateral etc "recently". Taking real estate owned by international your client in your county is one way to do it rather than gold.
But my understanding is that much of the security is transferring money in the form of Bank Transfers -the actual currency used is- again- depending on who is requiring the monetary value so the currency matters. For the US, holding a security position in a deposit account would usually be in USD.....foreign exchange fluctiations can put out of a secured position quickly, kind of like if you had accepted the amount of Rubles valued for 1,000,000USD three years ago you - it isn't worth that now.
A more common occurrence it to place a deposit with the bank in the required amount which is either released back (and or transferred back) to the borrower. Or, if you are a bank- and so is required to keep a reserve amount on deposit with the Federal Reserve- you wire them the amount required and they hold it (no interest). Requirements for reserves fluctuate based on a lot of things but it's calculated daily. At the end of the day the bank is required to have more funds "on reserve" it has to credit the FRB with the amount to bring it up to balance. If they have a surplus of reserves the -usually- "sell" it on the Federal Funds market overnight, essentially lending it out at an interest rate and that will be repaid at the end of the next day's settlement- unless the borrower continues to need it at which point is probably will get rolled over by the lending bank. More complicated than that but that is the way it works.
You can routinely buy or sell US Government Bonds longer multi-year/Notes 1 to 2 years /or Bills up to 1 year) electronically and the your brokerage firm (or bank's investment company) will hold those electronically in your portfolio. You CAN get physical paper for those but then you are responsible for keeping it secure and presenting in a timely manner to be paid at maturing or sell it.
You want to keep your money in Manticoran Dollars, Solarian Credits, Aldermani Marks (?) Or New Madrid peseta (what Spain used before the EU), Euros, Yen, Yuan...a lot of money center banks will let you deposit other currencies into specific account in that currency with them either by receiving a transfer in the currency or selling your the amount on the then current Bank Trading Rate at the time. So at Earth or Manticore you could have accounts in Manticore Dollars, Solaraian Credits or Aldermani Marks etc with the same bank if your company had reason to either need those currencies to pay for things where they use only one of those currency or you have to accept those currencies in payment and need to convert the.
Fun stuff. You can watch the cash value of your assets in that bank fluctuate all day long as you can probably get often hourly updates on fluctuating currency rates as data comes though the Junction

Please forgive my lack of time for the forum. It will remain this way for at least the next couple of months. God willing and the creek don't rise.

Bad news is I have not even begun to have time to read House of Steel. Good news is I don't exactly have to. I'd like to… but I do not have to. Not yet anyway to get my point across.

Even better news for all of you is that I have made a mistake. I thought HoS and the HV Companion were one and the same. Dunno how I failed to realize much sooner that they are not. In my “cornered the market” thread, I linked to the relevant portion of the thread in the HV Companion. Which again I thought is the same as HoS.

Still, I am puzzled at the disconnect, either mine or y’alls’. Because I don't see how anything changes. I'm really trying to see everything y'all's way, but it just doesn't make any sense when one considers how business works. What's more is everyone is quoting facts that are detrimental to your own case.

First off, let's clear up a misnomer. Cornering a market is not quite the same as dominating a market. Let's use one of my old time favorite games from the 80’s. Drug Wars.

Let's say Jose has shipped 100 tons of cocaine into the US. And let's also accept that Jose, by way of location and association, has access to an endless supply of cocaine from Columbia. Well, in effect, Jose has cornered the market on cocaine. But it does not follow that Jose has dominated the huge market for cocaine in the US. There are other sources of cocaine. It is simply that Jose’s cocaine is much cheaper because he has an unlimited access to an unlimited supply of cheaper cocaine. But it does not necessarily follow that Jose has greater access to the entire market across the US.

But, many of the buyers are going to buy from Jose if they can get access to him. Because his product is much cheaper and the supply is endless. An endless supply fuels the lower costs.

Now, and again, it does not follow that Jose dominates the cocaine market simply because he has cornered the market. Far from it. When the many smaller buyers buy from Jose, it is they who have access to all of the addicts. Let's bracket the fact that Jose is selling a superior product that can be stretched to make huge profits. Even without that fact, supply and demand will always be the mechanism that rules the market, and the world.

However, for every one-hundred sales that Jose has, the total market fueled by each of Jose's customers alone has thousands of sales of a product that sees an enormous markup in price. So, there is Jose’s hundreds of sales vs his buyers’ thousands of sales. No contest.

Jose continues to make enormous profits because he has access to the cheaper product in unlimited supplies. Because Jose has an unlimited supply, he can afford to sell his product much cheaper than it is going for in the market outside of his “store.” Which makes it possible for the smaller dealers to sell at a lower price than that which is offered in other markets whose demand is also high, but the supply is much lower. That fact also enables Jose to influence the market from his much more isolated and remote location.

Jose also wishes to expand his market even further. He wishes to break into the markets of the costlier suppliers. Jose only needs to travel to those markets to get direct access to those markets. He doesn't need to do so himself. He simply sends his trusted dealers into those markets carrying huge freighters full of product. This fuels what is called “turf wars.” Turf wars is one of the main reasons the SL hates Manticore. Unlike drug dealers, the SL couldn't simply perform drive-bys to shoot up the competition.

Turf wars is what the MBS initiates in League Space, influencing and taking over more and more of the League’s turf. If Jose has an endless supply of freighters, what do you think is going to happen in League Space over the years? Jose's cartel is going to get bigger and bigger, richer and richer. Carving out an ever increasing slice of the pie.

It still does not mean Jose has dominated the market. The market is as huge as the Hitchhiker’s Galaxy. And Jose cannot conceivably gain access to every street in every backwoods city on every backwoods planet in every backwoods system. But he is influencing the market because the smaller dealers who do much more volume than Jose in terms of numbers of sales has access to those markets.

Sooner or later, those smaller dealers get a tip on where their seller gets his product and off to the MBS to see Jose they go. Eliminating the more expensive Solarian middle man. Jose also enjoys a hearty empire and an intense supply and demand because of his location. He is close to ports where he can get an endless supply in reliably and timely.

@Jonathan. You still haven't answered my question. If the quote I referenced is talking about the MMM cornering the market on carrying trade 300 years ago, how do you think the MMM fared as time goes by? Their market share will increase.

The SL is closer to its planets than the MBS. Yet, the MBS influences prices. How can that be? It should be cheaper for the SL to deliver to its own planets since travel time is so short.

tlb wrote:I have found the relevant quote and it was briefly mentioned in your thread on whether the MBS "cornered the market". The author has specifically said that the financial area in the MBS was huge, BUT not tremendously bigger than other markets in the League.

You keep using that misleading word “bigger.” I already stated that the MBS’s market is not bigger. That's insane. The MBS’s market is not bigger. It is more influential and cheaper. That is why the MBS market can influence prices in a system that is both much farther away and is much larger. You are still having trouble with business.

tlb wrote:Here it is with a point to the source:

RFC wrote:I'm not saying that the Star Kingdom completely dominates the Solarian League's financial markets or stock markets or futures markets, because it doesn't. No single star system could completely dominate an economic system that huge. But Manticore is very definitely first among equals -- by a substantial margin -- compared to the other interstellar banking centers scattered around the galaxy. It could hardly be otherwise, with such a huge percentage of the galaxy's total trade and shipping passing through the Star Kingdom. Indeed, dear readers, I suspect that you are coming to understand (if you didn't previously) why a single-system polity like the Star Kingdom was able to ram an embargo on military technology to Haven down the Solarian League's throat.

tlb wrote:Because the author says that no single system could dominate, then it follows that no single system (including the MBS) could "corner the market".

-snip-

No that does not follow. Dominating a market and cornering a market is not necessarily the same thing. Do understand. Dominating a market can lead to cornering a market. But not vice versa.

But! The fact that the MBS was able to corner the market on “carrying trade” because of its enormous MMM, that same advantage allows it to corner the market on “carrying information.”

The MBS has cornered ths market on interior lines of communication. This fact has always assisted the RMN in its naval matters. But it also assists the MBS in information. Informtion that allows it to identify new markets, identify those market’s demands, and allow the MBS to broker much better deals with a much more comprehensive set of data in which to broker the best deals in bulk.

First among equals in banking puts a nail in the coffin. Made possible by those interior lines of communication. The MMM is not just carrying trade. It is amassing and carrying information collated and compiled from all of those routes.

Jonathan_S wrote:And note that he only goes on to say Manticore is first among equals in interstellar banking.

Surely you realize that the entire world’s economy is built upon and depends on just several of the world’s biggest banks, who rely on just a handful of the biggest investment companies who in turn rely on a handful of insurance companies? These companies rely on the best compiled data. Wall Street. The MBS has information from all over the galaxy available in one location. The MBS probably has better information on the SL’s systems than the SL does.

Jonathan_S wrote:He specifically does NOT claim they're first among equals for financial markets or stock markets or futures markets -- merely that they don't dominate the Solarian markets for those.

If someone is first in banking, and banks run the economy then why can't you sew the threads together? And again, dominate and corner the market are two different things.

Jonathan_S wrote:That's enough to confirm they haven't cornered those markets -- but leaves quite unclear how they actually rank against various League financial markets or stock markets or futures markets. I would think that if they were also first among equals there that RFC would have said so; rather than narrowing that down to just interstellar banking. But that's not something we can 100% rely on.

Any higher than very much first among equals would seem to take us in the "dominate" region where we've been told they aren't.

Again, dominate does not equate to cornering markets. And if the MBS is first among equals, then that includes the SL as well! Any entity who is unequal to the SL in banking certainly could not cause them to lower their prices in trade when the SL’s systems are – as you all point out - much closer and operating costs should be much lower. The SL should have been able to secure much cheaper loans from their banks to allow them to squeeze the smaller MBS out. Even with the much larger MMM.

Jonathan_S wrote:But it leaves open the possibility that they're a significantly smaller player in those other financial, stock, future markets for the League than they are for banking.

Sorry, but that simply does not follow in my warped brain.




Forgive my use of of drugs to make my point. But Drug Wars was a great and entertaining time waster of yesteryear. It still is with the many advanced versions that are out now.

penny wrote:Again, dominate does not equate to cornering markets. And if the MBS is first among equals, then that includes the SL as well! Any entity who is unequal to the SL in banking certainly could not cause them to lower their prices in trade when the SL’s systems are – as you all point out - much closer and operating costs should be much lower. The SL should have been able to secure much cheaper loans from their banks to allow them to squeeze the smaller MBS out. Even with the much larger MMM.

In normal parlance "cornering the market" is someone who gains a near monopoly on something, so that anyone who needs it will have to buy at inflated prices. No one corners a market in order to lower prices. Cornering a market means someone has done MORE than just dominate it. Here is a quote from the Quickonomics website explaining that:

Corner (A Market) Published Apr 7, 2024

Definition of Cornering a Market
Cornering a market refers to the process by which an individual or firm obtains enough control of a particular stock, commodity, or other asset to manipulate its price. This typically involves gaining significant holdings in the asset, thereby reducing available supply and allowing the entity that has cornered the market to dictate terms for its sale. Though potentially profitable, the practice is highly scrutinized and regulated due to its ability to disrupt fair market operations.

Example
Consider the hypothetical scenario involving Company XYZ, a large entity in the cocoa manufacturing sector. If Company XYZ starts buying large quantities of cocoa beans, slowly accumulating a majority of the market’s supply, they are effectively cornering the market on cocoa beans. By doing this, the company can create an artificial scarcity of cocoa beans, pushing the price higher because of reduced supply. Consequently, Company XYZ can sell its cocoa beans at a premium or dictate the market terms to manufacturers who need cocoa beans, securing significant returns on their investment. However, such actions might lead to regulatory scrutiny and potential legal action, given the impact on competition and market fairness.

Why Cornering a Market Matters
Cornering a market can have serious repercussions not only for the asset in question but also for broader market dynamics. For one, it undermines the principles of free and fair competition, which are foundational to most modern economies. Both consumers and businesses can suffer as prices become artificially inflated, leading to inefficiencies and economic imbalances. Moreover, the entity that corners the market might face serious legal and reputational risks if their actions are deemed manipulative or monopolistic.

Corner (A Market)

In 1980, the Hunt brothers, Nelson Bunker and William Herbert, attempted to corner the silver market, leading to one of the most significant market crashes in history. The Hunt brothers, who inherited their father’s oil business, were known for their wealth and influence in the commodities market. They believed that the US government’s decision to increase interest rates and allow the dollar to appreciate would lead to inflation and a rise in silver prices.
The Hunt brothers began buying silver futures contracts, which gave them the right to purchase silver at a set price in the future. As they continued to buy contracts, the price of silver began to rise, and they started to accumulate physical silver as well. The Hunt brothers’ actions caused panic in the market, and many investors began buying silver in fear of a shortage. The price of silver skyrocketed from around $6 per ounce in early 1979 to almost $50 per ounce in January 1980. However, the bubble eventually burst, and the price of silver plummeted, causing widespread financial losses.

Silver Thursday (1980): The Hunt Brothers’ Attempt to Corner the Silver Market and the Resulting Market Crash

tlb wrote:

penny wrote:Again, dominate does not equate to cornering markets. And if the MBS is first among equals, then that includes the SL as well! Any entity who is unequal to the SL in banking certainly could not cause them to lower their prices in trade when the SL’s systems are – as you all point out - much closer and operating costs should be much lower. The SL should have been able to secure much cheaper loans from their banks to allow them to squeeze the smaller MBS out. Even with the much larger MMM.

In normal parlance "cornering the market" is someone who gains a near monopoly on something, so that anyone who needs it will have to buy at inflated prices. No one corners a market in order to lower prices. Cornering a market means someone has done MORE than just dominate it. Here is a quote from the Quickonomics website explaining that:

Corner (A Market) Published Apr 7, 2024

Definition of Cornering a Market
Cornering a market refers to the process by which an individual or firm obtains enough control of a particular stock, commodity, or other asset to manipulate its price. This typically involves gaining significant holdings in the asset, thereby reducing available supply and allowing the entity that has cornered the market to dictate terms for its sale. Though potentially profitable, the practice is highly scrutinized and regulated due to its ability to disrupt fair market operations.

Example
Consider the hypothetical scenario involving Company XYZ, a large entity in the cocoa manufacturing sector. If Company XYZ starts buying large quantities of cocoa beans, slowly accumulating a majority of the market’s supply, they are effectively cornering the market on cocoa beans. By doing this, the company can create an artificial scarcity of cocoa beans, pushing the price higher because of reduced supply. Consequently, Company XYZ can sell its cocoa beans at a premium or dictate the market terms to manufacturers who need cocoa beans, securing significant returns on their investment. However, such actions might lead to regulatory scrutiny and potential legal action, given the impact on competition and market fairness.

Why Cornering a Market Matters
Cornering a market can have serious repercussions not only for the asset in question but also for broader market dynamics. For one, it undermines the principles of free and fair competition, which are foundational to most modern economies. Both consumers and businesses can suffer as prices become artificially inflated, leading to inefficiencies and economic imbalances. Moreover, the entity that corners the market might face serious legal and reputational risks if their actions are deemed manipulative or monopolistic.

Corner (A Market)

No. You are wrong. Again, cornering a market does not mean dominating a market. In Trading Places do you think Winthorpe and Valentine's sales came anywhere near the sales of the buyers after they bought from the two of them?

Cornering a market means acquiring a large share of a commodity at a much lower price and selling at a much higher price. What foolhardy individual will buy a surplus of a commodity and not be able to make a profit on it. Then they are stuck with it.

penny wrote:No. You are wrong. Again, cornering a market does not mean dominating a market. In Trading Places do you think Winthorpe and Valentine's sales came anywhere near the sales of the buyers after they bought from the two of them?

Cornering a market means acquiring a large share of a commodity at a much lower price and selling at a much higher price. What foolhardy individual will buy a surplus of a commodity and not be able to make a profit on it. Then they are stuck with it.

In Trading Places their plans failed because of a forged market forecast. The Hunt Brothers may have failed in 1980. But I am glad to see that you agree with me as to the meaning of "cornering the market" (in the highlighted text). You have to dominate the market to force people to buy at the inflated price; if they could buy sufficient and cheaper elsewhere, then the corner has failed.

Note that the Hunt Brothers might have recouped their investment if they had sold sufficient stock before the price crash. However when a group that has almost cornered a market starts to sell their holdings too quickly, that can cause the price to drop rapidly.

Edited to indicate cornering fails, if customer can buy enough for their needs at a lower price.

.