I looked up onions, lettuce and tomatoes (because burgers), and the volatility actually looks very similar. Am I missing something or looking at the wrong things?
Lettuce and Tomatoes don't keep well, which adds more seasonal variability and reduces the ability of a futures market to smooth prices.
Compare with potatoes, which keep about as well an onions, and are farmed in the same areas. Look at onions and potatoes over a 5-year time span (because the default all-data time span is silly for this). It doesn't give enough control of the Y axis to make the comparison easy - for potatoes it shows me Y=40-320, for a range of 280; for onions it shows me Y=120-440, for a range of 320. This means that potatoes are more "zoomed in" and it's graph will exaggerate volatility relative to onions, but qualitatively, I'd say the potato graph looks smother just the same. This is exactly what economic theory says a futures market should do to the price.
> Lettuce and Tomatoes don't keep well, which adds more seasonal variability
The more durable a produce is, the easier it is to transport over a large area, which will always smoothen price fluctuations. This alone could explain why lettuce and tomatoes have higher volatility than onions, which have higher volatility than potatoes, which have higher volatility than corn and weat.
At least that's the null hypothesis that the hypothetical effect of futures should be compared to.
I know nothing about logistics of the food supply chain and how they preserve food at scale, but at least at home I'd say that potatoes are close to twice as durable as onions.
Or to bring it back to the original context... Reducing volatility would be reducing the impact of bad weather on your harvest, absorbing volatility is finding someone to cover your losses. (presumably by giving up some profits on the good years. It's like a financial low pass filter)
Volatility is a natural consequence of weather, blight, etc., etc.
To reduce volatility you would need to actually stabilize the supply of onions.
What futures do is allow traders to shift risk from the future to the present. By pricing that risk, it's possible for people who depend on onions to pay a little more now in exchange for a guarantee about the future.
It's not magically going to make onions less volatile (although high risk prices can spur investment which might) but it can reduce disruptions caused by volatility.
The classic example of this is futures on jet fuel which allow airlines to weather random wars in the middle east, OPEC shenanigans, etc. Ticket prices are higher this way, but the existential threat of being forced to cancel a bunch of flights is gone.
For speculators yes. But for a farmer and the consumer of the goods they would rather lock in a margin for their goods and run their business than risk guessing what the price will be at harvest time or consumption time. It’s called hedging.
People are willing to lose a small but predictable amount of money to avoid occasionally and unpredictably losing a massive amount of money. The former is a loss they can plan for and absorb. The latter might kill their business.
Traders are often happy to take the other side of that trade because they can trade against many counterparties, collect a small premium from each one, and try to ensure their counterparties won’t all fail in a correlated way.
You may have liabilities or income that exist outside of financial markets e.g. if I have 500t of wheat due to be harvested I might want to hedge enough to guarantee I can pay my staff - ive locked in the price of wheat, I might make less money as a result but my risk is lower.
Are you sure they were using "chat" to refer to ChatGPT? I have noticed many kids now use chat to refer to the collective audience/chat participants, and then gets used rhetorically even when no literal chatroom exists. A streamer says things like “Chat, what do you think?” or “Chat, are we cooked?” That usage has spread well beyond literal livestream chats, particularly among younger people.
The streamer is talking to the people in the stream’s chat room. Every streamer refers to all the people in the chat room as “Chat”. Kids these days use the same collective noun for everyone in their group chat.
Decoys. Have them celebrate the win while doing other stuff. It is the same tactic used by cartels. They have small time mules run around vulnerable on interstates and getting caught by cops to occupy their time while they move larger loads conspicuosly.
On visiting the actual oldinsurancemaps.net, I was met with:
"OldInsuranceMaps.net is a Charter Project of OpenStreetMap US that provides an open, online workflow for creating georeferenced layers of historical maps, with a special focus on making seamless mosaics from multi-page atlases in the Sanborn map collection at the Library of Congress."
Sanborn was an insurance adjacent company that made detailed paper maps of many towns in the US in the late 1800s and early 1900s.
This project is scanning those maps and adding the information that modern mapping software needs to show them alongside other geographic information. Where the old paper maps overlap, they work to cleanly stitch them together rather than showing the edges of the paper.
Later: The project is sort of for people looking for the old maps, so I can see why the introduction doesn't spend a life of time explaining them.
They are building computer programs that other people can use to then post online maps from old paper sources. For example, from the Sanborn map collection.
Those maps can be browsed as "overlays" on top of other maps, so you can easily compare how several maps show the same places on Earth.
I think that would make her very good at learning (not the things she is learning) and that is why she talks about things from a learning perspective. That would qualify her for the other commentor's bar.
Tomato: https://fred.stlouisfed.org/series/WPU01130217 Onion: https://fred.stlouisfed.org/series/WPU01130216 Lettuce: https://fred.stlouisfed.org/series/WPU01130215
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