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The ultimate slayer of the pork commodity market. (iStockphoto)

"Now, What Are Commodities?"

by Peter Granitz
Aug 2, 2011

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Peter Granitz

The Chicago Mercantile Exchange recently ended the sale of pork bellies.

Apparently, and despite a Golden Age of sorts for bacon, the pork commodities were just too volatile. It ends up the pork belly market owes its demise to its own success. The year round need for bacon (yes, need) has nixed the summer-time high season for trading frozen slabs of pork.

The New York Times reports it's the end of a little known and misunderstood culture, one with burly men hollering in a pen, so to speak:

Still, the demise of the futures means something else is really gone now, too — a unique belly culture and its hard-charging, daring cast of characters who, decades ago, made their fortunes in the high pressure of the belly pit.

"It was a club," said Gary Wilhelmi, who arrived at the Chicago Mercantile Exchange as a markets reporter not long after pork bellies helped pioneer the exchange's livestock futures markets in 1961. "If you were new, you could come to the trading floor, and you could come to the belly pit. But they wouldn't trade with you."

There was the balding trader whose wig was seen as a gauge of the market's volatility; on the craziest days, the wig's part ran ear to ear, Mr. Wilhelmi recalled. There was the analyst who died right there. "Bellies killed him," Mr. Wilhelmi said. And there was the veteran trader who once told Mr. Wilhelmi — who was, at the time, trying to analyze a trading report on pork bellies — not to bother. "The bellies," the trader told him, "are what we say they are."

And perhaps most importantly, it means Trading Places and its 101 lesson in the markets, is more dated than ever.

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