Características de las antenas resonantes

Daily price determination in cotton markets is a very complex process (see Çaliskan 2009), and such complexity was not inferior at the time when Keynes was active as a speculator (see Garside 1935: 345-65). If, broadly speaking, data relating to world demand and supply may exert a dominant influence on price trends over a time horizon

of some months—and Keynes’s approach to selecting the information he published (and presumably deemed most relevant) in the Special Memoranda on Stocks of Staple Commodities for the London and Cambridge Economic Service suggests that he was

persuaded of the importance of this influence—more strictly speculative influences may certainly be crucial in shorter time horizons. More specifically, being cotton an annual crop, the period when the crop actually reaches the market and the fact that its use in industry would spread over the whole year are important elements which may be seen as introducing a somewhat regular trend component in price movements, but also complicating a more straightforward and general comparison between annual supply and demand. Furthermore, the importance of accumulated stocks and their influence in the determination of actual annual supply must be considered—and the Memoranda

show that Keynes gave importance to all these elements. But also rumours, estimates, forecasts and facts relating to the amount of land (acreage) annually devoted to cotton cultivation, to weather conditions from winter, when land is prepared for the cultivation, till the end of the picking season (cotton fruits over an extended period, and in the USA the picking season approximately starts in August and ends in January) had (and still have today) an important influence on prices in both spot and futures markets. Similarly important were data relating to the presence of pests, and in particular of the boll weevil.17 Reports relating to these elements were crucial to assess the size of each year’s crop, but they were also subject to much approximation and to provide indications which could be corrected or reversed by further information.18 And somewhat similar arguments may be applied to estimates of world demand for cotton and to its evolution through time.

The links we had attempted to establish at the end of Section 2 between the theory of speculative markets as elaborated and published by Keynes during the 1920s and his activity on the cotton market are not disproved by the analysis of the data we have been able to collect. But what may be stated with sufficient certainty is, so to speak, much less pretentious. During the period considered in this paper, the cotton market went through two main periods, one of relative scarcity, until 1925, and, afterwards, one of abundance, with a peak of excessive supply in 1926-27. Throughout these two periods, Keynes very rarely abandoned his strategy of staying long. However, it is only from 1921 to the spring of 1923, when the Manchester Guardian article appeared, that

17 _{Since its first appearance in the USA in 1892, the boll weevil had caused damages to the cotton crop as}

high as 34 per cent (Hubbard 1928: 40-1, 124; Garside 1935: 23-6).

18 _{For instance, estimates of acreage may involve considerable approximation; a wet autumn and early or}

late frost at the end of the picking season may cause large crop estimates corrections (Hubbard 1928: 19-37; Garside 1935: 13-28).

Keynes’s behaviour can be taken as a good representation of the idea of routine speculation as risk-bearing as well. When, after 1923, the scheme of sale and repurchase was abandoned, it seems that Keynes made some attempts at using the information he had, adapting his strategy to a changing outlook.

Immediately after 1923, Keynes observed the change from a state of scarcity to one of increasing plenty, and the earlier Memoranda suggest that this change was perceived

with some delay; nonetheless, it seems that Keynes tried to adapt to the new situation, reducing his long positions and even making some attempt at staying short. After 1925, however, during a period of falling prices quite consistent with the outlook given in the

Memoranda, Keynes did not go short. Rather than that, at intervals, he entered and

exited the market staying prevalently long, as he was waiting for the rebound of prices that eventually happened in 1927. What can be very tentatively concluded is that Keynes followed a sort of asymmetric strategy, consisting in staying systematically long when the expectation was for a rise in prices but not necessarily short in the opposite situation.

References

Baffes, J. and Kaltsas, I. (2004) ‘Cotton Futures Exchanges: Their Past, Their Present and Their

Future’, Quarterly Journal of International Agriculture, 43 (2): 153-76.

Belussi, F. and Caldari, K. (2011) ‘The Lancashire Industrial District: Its Rise, Prosperity and Decline in the Analysis of British Economists’, in T. Raffaelli, T. Nishizawa, and S. Cook

(eds), Marshall, Marshallians and Industrial Economics, 132-62, London: Routledge.

Çaliskan, K. (2009) ‘The Meaning of Price in World Markets’, Journal of Cultural Economy, 2

(3): 239-68.

Fantacci, L., Marcuzzo, M.C., and Sanfilippo, E. (2010) ‘Speculation in Commodities: Keynes’

“Practical Acquaintance” with Futures Markets’, Journal of the History of Economic

Thought, 32 (3): 397-418.

Garside, A.H. (1935) Cotton Goes to Market, New York: Stokes.

Hubbard, W.H. (1928) Cotton and the Cotton Market, 2nd edn, New York: Appleton.

Kaldor, N. (1980 [1939]) ‘Speculation and Economic Stability’, in Essays on Economic

Stability and Growth, 2nd edn, London: Duckworth.

Keynes, J.M. (1971-1989) The Collected Writings of John Maynard Keynes (CWK), Managing

Editors E.A.G. Robinson and D. Moggridge, London: Macmillan.

CWK V. A Treatise on Money. Part 1. The Pure Theory of Money.

CWK XII. Economic Articles and Correspondence, Investment and Editorial.

Keynes, J.M. (1923) ‘Some Aspects of Commodity Markets’, The Manchester Guardian

Commercial, European Reconstruction Series, Section 13, 29 March, as reprinted in CWK

XII, 255-66.

Keynes, J.M. (1923-30) Special Memoranda on Stocks of Staple Commodities, London and

Cambridge Economic Service, in CWK XII, 267-647.

Marchionatti, R. (1995) ‘Keynes and the Collapse of the British Cotton Industry in the 1920s: A

Microeconomic Case against Laissez-Faire’, Journal of Post Keynesian Economics, 17 (3):

427-45.

Rees, G.L. (1972) Britain’s Commodity Markets, London: Paul Elek Books.

Smith J.G. (1922), Organized Produce Market, New York: Longmans and Green.

Appendix

Table A1: Analysis of Keynes’s investments in phase 2, 1923-29

Year Keynes’s outlook (as from Memoranda) and trend of prices Keynes’s investments 1923

April, Memo No.

1: scarcity Prices rising to the peak of 20 points in December

March and April: two purchases (100 bales each) for delivery in October. These positions will be closed in August and September at a positive difference of £ 362.

In June Keynes buys 200 bales for delivery in January 1925 (this will result in a considerable gain of £1176).

In Autumn, a new long position for 300 bales on July 1924 is opened (it will be increased to 500 bales during 1924)

On 20 September, a long position on 100 bales for delivery in August 1924 is opened (it will be taken to delivery).

1924

June:

Memo No. 2:

scarcity

Prices falling from the peak of 20 points to 13 points at the end of the year

The long position on July is increased to 500 bales.

Another long position, 400 bales on October, is cumulated between February and June.

The long position on July closed between April and July at a positive difference of £482.

On 1 August the contract on 100 bales for delivery in this month purchased on 20 Sept. 1923 is closed. The difference is +£622.

The long position on October is closed very closed to delivery at a loss (– £358)

In October Keynes opens a long position on 200 bales for delivery in December. The position will be closed in December at a loss (–756). A new and larger cycle on July 1925 is opened during the Autumn: 2100 bales (that will grow to 2600 in April 1925).

In November Keynes opens a 2000 bales short position on October 1925 (that will be closed early in 1925).

A new small position on 100 bales for delivery in May 1925 is opened in December.

1925

July, Memo No. 3:

scarcity is less than expected The decline of prices continues: below 10 p.ts at the end of the year

January and a December: very small gain closing the short position on 1000 bales for delivery in October this year.

August: a long position on 300 bales for delivery in October is opened (it will closed in September at a positive difference of £664).

Between March and July the big long position (2600 bales) on July is closed at a cumulative loss of –£732).

In October Keynes purchases 300 bales for delivery in January 1926. The position is closed on 31 December at a negative difference of –£696. At the end of December Keynes bought 400 bales for delivery in October 1926).

1926

February, Memo 4:

plenty. Prices barely above 6 p.ts at the end of the year after constant decline

A minor position (100 bales) on July opened in March Open interest reduced to zero in July

New long position on 300 bales, delivery January (1927), opened between July and October (and new losses: –£618).

September: purchase of 100 bales for delivery in March (this will be closed at a loss in January 1927).

400 bales for delivery in May 1927 purchased in August and September (this will be closed in 1927 at a loss).

June and July: Keynes closed at a negative difference of £404 the October cotton bought in December.

Between August and September Keynes buys 2000 bales for delivery in July 1927 (to which 600 bales will be added before the end of March: this cumulative position of 2600 bales will result in a profit of £7156, the largest ever).

New large position on October 1927 (600 bales, it will gain Keynes another relevant profit of £2300).

In December Keynes buys 200 bales on December 1927 (and again this will result in a good profit of £1884).

1927

March, Memo No.

5: plenty and regulation. Gradual recovery of prices: above 10 p.ts in December

Keynes brings the open interest on July to 2600 bales (from 2000) and then realises the relevant profits on this position and the other two on October and December opened in 1926. The cumulative gross profits from these three contracts amounts to £11340.

The open interest is zero in July. No new position is opened until December.

1928

No Memorandum

for this year. Fluctuations of prices between a min. just above 9 p.ts and a max. just below 12 p.ts

January and February: sales of 600 and 500 bales on January 1929. As a result Keynes is net short for a while. All these short positions are closed before the end of April at a loss of –£1138.

In May Keynes opens two long positions, again on January 1929, closing them in June and thus obtaining a small gain.

In June, a new short position on January 1929 is opened. It will be closed in July and August with new losses of –£442.

In August, another small long position on January 1929 (100 bales) is opened, and a new small loss comes (–£42) when this position is closed (very soon, on 27 September).

1929

Memo No. 6.

Price quite stable at around 10 p.ts

–£485 cumulative losses on minor long positions on July and October 1929. Minor losses from two small long positions on March and January 1930.

Sources: Keynes’s ledgers, London and Cambridge Economic Service Special Memorandaon Stocks of Staple Commodities: TheTimes online Archive.