From legendary short seller to god of American capital

Chapter 384 The Scheme Behind the Scenes: Kennedy Decides to Withdraw His Investment

Following "Black Monday," news of the unprecedented collapse in wheat prices quickly spread throughout the United States.

The entire United States was shocked because spot prices fell in tandem with futures prices. The elites didn't believe that falling food prices would benefit the poor; instead, they immediately attributed the collapse in wheat prices to Europe ceasing wheat imports from the US, claiming it harmed America's poor!

Impoverished farmers in the western states were outraged, blaming the government's disastrous trade war policies and its restrictions on large-scale silver coin production for their plight.

Of course, industry insiders have their own opinions. The Chicago Tribune published a signed article the following day, roughly saying, "—This week's Chicago Mercantile Exchange is destined to go down in history, but not in glory. The carnage-like drop in September wheat futures not only wiped out the margin of countless small and medium-sized traders, but also put at least three large brokerage firms at risk of liquidation."

Market rumors suggest that the plunge, which began on Monday, was a carefully orchestrated ploy to lure in buyers with a gap-up opening. An anonymous trader, through the brokerage firm Stone, allegedly bought heavily at 73 cents above market expectations at the open, creating the illusion of a strong rebound.

However, once the price was pushed above 77 cents, the group reversed course and launched a massive sell-off, using its huge profits as ammunition to repeatedly dump shares at key points, completely shattering market sentiment.

Veteran trader Bill Stone declined to comment, citing his strict adherence to client orders. However, his almost ruthless execution within the trading pool has led many of his peers to view him as a harbinger of disaster. It is understood that his clients may have profited hundreds of thousands of dollars from this single trade.

However, behind these blood-stained profits lies an atmosphere of despair permeating the exchange hall, and the cries of bankrupts.

This incident has once again raised serious questions among the public regarding market manipulation and risk control.

While both are media reports, Wall Street newspapers are much more objective; they even analyze the Chicago wheat collapse with an appreciative eye.

Also in its September 22nd report, The New York Sun's financial column was titled, "Chicago Wheat Collapse:

Is it a disaster, or a masterful market insight?

"—When the news of the wheat price collapse reached New York via telegram from Chicago, the bankers in Manhattan clubs simply shrugged. However, in some private exchanges on Fifth Avenue that were not open to the public, the real market veterans sensed something different in this distant storm."

An unnamed Wall Street veteran (believed to be closely associated with legendary trader James Keane) commented: "Leaving aside the ethical controversies, the timing of this operation, the guidance of market sentiment, and the ruthlessness and precision of using unrealized profits to add to the position and dump shares in the final stage are all textbook examples."

This is not blind gambling, but a perfect hunt built on extreme confidence and a deep understanding of the market's microstructure.

This ability to seemingly see the location of every stop-loss order and precisely utilize it is reminiscent of Sir James Keane's heyday.

Indeed, true hunters appreciate hunters. Although the identities of these (or these) anonymous Chicago winners remain a mystery, their ruthlessness, patience, and explosive power are enough to earn them a place on the East Coast financial giants' watchlists. In the eternal arena of the market, strength is the only passport—”

Perhaps only The Wall Street Journal is relatively objective and does not pursue sensational news.

The editor wrote a commentary arguing that the recent wheat price drop was an inevitable result of a bumper US wheat harvest coupled with a halt in European imports. The main reason, he concluded, lay in the fundamentals.

October 9, Wednesday.

New York, James Keane's study.

A sudden chill in the air prompted the first fire to be lit here since the summer. The flickering flames reflected on James Keane's expressionless face.

He had just finished reading the detailed transaction records sent from Chicago.

"Sir, should we adjust our positions? There's a lot of panic in the market; perhaps we could partially close out our positions to lock in profits," a young assistant asked cautiously.

Keane put down the report, gently stroking the mahogany armrest, and frowned slightly. "Adjustments? Why adjust? Panic is our best ally."

As he spoke, a glint of pleasure flashed in Keane's grey-blue eyes. "This gentleman who stirred up trouble in Chicago has helped us execute a perfect market crash. He's now the target of everyone's anger, drawing all the firepower and unnecessary attention. Heh heh—"

James Keane stood up, walked to the huge North American map with his hands behind his back, pointed to the locations of Lake Michigan and Chicago, and said with a smile, "Our short positions are based on a bumper harvest in Kansas, cheap wheat along the Black Sea coast, and weak demand in Europe."

Have these fundamentals changed? No! So why change strategy because of a technical fluctuation?

"Your position has ballooned to 800 lots. As you mentioned in your previous memo, holding such a large position is dangerous, and you should take profits," the assistant reminded you.

Keane hesitated for a moment, then waved his hand and said, "Let this newcomer attract attention. We just need to wait quietly. The real trend will only continue when the market's attention is completely drawn to it, and when everyone thinks the crash is over. Oh, by the way—has the Reading account been touched?"

The assistant replied, "Livingston's account was completely liquidated on Tuesday. He must have made a considerable profit this time—"

"Hmph! He's still too green. He's eager to cash out as soon as he sees the market drop. I don't think he'll amount to much in the future."

Keane's finger traced Chicago on the map, as if caressing an intriguing chess piece. "Tell our futures traders to hold their positions and wait and see. I'm going to set a record for profits on this wheat decline. I also want to see if my Chicago counterpart will take his profits or have an even bigger appetite!"

A faint smile flickered across his lips.

My ability to capitalize on this wheat price collapse solely through my grasp of the fundamentals is truly commendable.

That kid named Larry Livingston, though he was shorting at Reading—it was clear he lacked the flair for stock market trading. His limits weren't very high either.

But this expert trader in Chicago—

James Keane didn't need to find out who his opponent was. In a battle of wits, sometimes you don't even need to meet in person; Keane could sense his opponent's presence through the pulse of the market.

He felt a long-lost excitement, as if a worthy companion had appeared in the hunting grounds.

"Another expert has emerged! Interesting. However, your fate is only to serve as my pawn!"

James Keane said with a smile.

Meanwhile, inside a mansion in Chicago.

Massachusetts Senator Kennedy, swirling his brandy, said to Illinois Democratic Chairman Altgillde sitting across from him, "Peter, did you see the wailing in the Tribune? They've portrayed our young friend as a reaper from hell."

Altgillard sighed, his expression complex. "Patrick, to be honest, I admire Livingston's talent. His boldness, vision, and timing in this operation were nothing short of miraculous. But—"

He changed his tone and continued, "But this method is too ruthless. It's easy to give others a handle against us. Besides, haven't you noticed how powerful this person is? What we need are stable supporters, not a cannon fodder that can hurt us."

Kennedy nodded, his gaze deep. "I understand your concerns. That kid is a genius, but he's also a double-edged sword. We must guide him, ensuring his abilities are used only in more—constructive—situations."

The other party nodded. "It's good that you can control him—Mr. Cleveland's campaign tour is going very well. He will be back in Chicago this weekend for his final and most important speech, which is our main event."

Kennedy laughed and said, "I've already contacted the media. After the first wave of public opinion subsides, all the anger will be focused on the Republican Party. Also, I've made an appointment with a friend—want to meet him?"

I think relying solely on Livingston won't cut it; he's already done a remarkable job driving down futures prices. We need another ally, someone equally shrewd, but even more powerful.

"Who is it?" Altgerd raised his eyebrows.

Kennedy gave a mysterious smile and turned to his secretary, "Please invite Mr. Durant in!"

"Durant? You mean, that—the Republican kid?" The other person visibly tensed up.

Kennedy smiled. "Peter, this guy came to see me privately yesterday. He wants to come to you through my connections. Don't worry about his previous political leanings; what matters is his ability. And he also told me about a very important plan."

Altgild nodded, said nothing, and waited quietly.

Shortly after, Durant entered, carrying a cane and adjusting his top hat. He nodded to Kennedy first, then bowed to Altgillde, who was seated at the head of the table, and said, "Governor, it is an honor to meet you."

"I won't take office until next year!" Altgild waved his hand.

"Next year will be a great year for the state's economy, and I and all the decent gentlemen in Chicago are waiting for that day!" Durant said with a smile.

The latter nodded. "Are you in the carriage business?"

"Yes! I am the largest carriage manufacturer in the entire United States, but—I'm now transitioning to making horseless carriages!"

What is a horseless carriage?

Seeing the governor's interest, Durant smiled. "Sir," he said, "horse-drawn carriages are destined to be relics of the past. Horseless carriages—or automobiles—are the future of transportation. I believe they will not only be toys for the wealthy, but they will change everything—distances, city layouts, and people's lifestyles!"

Imagine an ordinary working-class family able to drive to the countryside for a picnic on the weekend, with fresh milk and vegetables quickly delivered to every corner of the city by car. Postal and logistics speeds would increase tenfold.

The governor frowned, then turned to Kennedy and asked, "Are you familiar with this car he's talking about?"

Kennedy thought to himself, "I know this all too well," and sat up straight, saying to the latter, "Four-wheeled vehicles powered by internal combustion engines—I've been keeping an eye on that. We have inventors working on these kinds of projects in Massachusetts too."

"That sounds like it's very far away and very expensive," the governor commented cautiously.

“No, Peter, it’s true!” Kennedy leaned forward. “You should see it for yourself sometime; it’s a revolutionary mode of transportation. But you have to find the right people—I funded a car project locally, but the guy was a complete jerk. I really regretted it and wanted to back out.”

Durant then addressed the governor, saying, "Sir! Chicago and Detroit are currently the most important manufacturing centers in the United States. We have both unique advantages and an industrial base. If new, revolutionary modes of transportation can spread from here to all of America, it will bring sustained prosperity to the region!"

The governor nodded. "I'll take a look when I have the chance—Patrick, where did you first learn about this car project?"

""

"—From Livingston!"

Kennedy gave a wry smile, took a deep breath, as if making a decision. "That guy was encouraging me to invest in a car project. However, after meeting with Mr. Durant, I've made a decision—I'm prepared to withdraw my funds from the Ford project and fully support Durant. This isn't just an investment; it's a bet on the future."

Mr. Durant needs more than just funding; he needs policy understanding and support. He has a clear expansion plan: to acquire several promising manufacturing companies and build a true automotive empire. In contrast, my previous investments in Boston were far too small-scale—obviously!

"A wise choice, Your Excellency!" Durant said with a confident smile.

"As for Larry Livingston—" Kennedy paused for a moment, "we need him. His financial talent is an unparalleled weapon, but we must find a more suitable battlefield for him, or at least ensure that this sharp weapon doesn't hurt us."

"Yes! These low-level guys who dream of climbing the ladder, we just need to give them a little push now and then!" The governor chuckled, tapping his finger on the armrest before turning to Durant. "Sir! If we can cooperate, I will fully support you during my term. Let's work on the car project!"

"Thank you for your generosity. I will build an industrial cluster around automobiles for you in Chicago! It would be wonderful if you could invest in our company!" Durant politely thanked the governor for his generosity.

What's the name of your car company?

"General Motors!" Durant said with a smile.

The governor nodded, then turned to Kennedy. "Patrick, is this what you meant by Mr. Durant's important plan?"

"No, Mr. Durant has ways to damage the People's Party's reputation." Kennedy turned to look at Durant.

"Oh? Tell me about it!" The governor's eyes lit up as he looked at Durant.

"I heard that one of the leaders of the People's Party is going to visit the striking railway workers. I know a few out-of-towners who can help stir things up—" Durant smiled.

"But wouldn't that disrupt the state's security?"

Durant dismissed the suggestion, saying, "You won't be in office until next year anyway. As long as you give me a chance, the Democrats' chances of winning will continue to increase."

"What exactly are your plans?"

"I don't know, and you don't know either—it's all the fault of those reckless guys from out of town," Durant replied deftly.

"So, what are your terms for the exchange?" the governor asked again.

"Please contract out the reconstruction of the workers' shantytown to me! If possible, please let me replan that land," Durant replied with a smile.

Having said all that, no further words were needed. The three looked at each other and smiled.