The 1920s Piggly Wiggly short squeeze

Before GameStop was a glimmer in a Redditor's eye, the founder of Piggly Wiggly tried to break Wall Street. Clarence Saunders saw investors betting his grocery chain would fail, so he bought up almost every share in existence to trap them in a massive short squeeze.

He had the bears cornered, ready to name his price. It was a masterpiece of spite against the people rooting for his downfall.

Then, the Stock Exchange did the most predictable thing ever: they changed the rules mid-game to save their wealthy friends. Saunders went broke, proving that even when you play the game perfectly, the house just moves the goalposts.

Wait, how exactly did they change the rules to screw him over?

They pulled the ultimate "I'm the captain now" move. The New York Stock Exchange simply suspended trading of Piggly Wiggly shares and gave the short sellers a massive, unprecedented extension to find the stock they owed.

Imagine playing poker, catching your opponent bluffing, and right as you go to collect the pot, the casino owner steps in and says, "Actually, we’re giving him five more days to find the money." It was institutionalized cheating designed to protect the "old money" club from a grocery man who played too well.

Couldn't he just sue them for changing the rules like that?

He tried, but suing the NYSE was like suing the ocean for being salty. Their charter gave them the "divine right" to do whatever they wanted to keep the market "orderly"—which is just code for "saving the rich guys from their own stupidity."

By the time a lawyer could help, Saunders was already drowning. He’d borrowed millions to pull off his trap, and the Exchange's delay let his interest payments turn into a noose. He lost his stores and his fortune, proving that on Wall Street, being right matters less than being "one of the boys."

So is this 'orderly market' excuse still used to bail out big players?

Absolutely. Today, they call it a "trading halt." It’s marketed as a safety net to prevent panics, but the logic is identical: when the "wrong" people win too big, the house hits the pause button.

Look at modern "glitches" where brokerage apps suddenly block buying during high volatility. They claim it’s to protect the system’s integrity, but it’s just the same old trick with better graphics.

The house always has a kill-switch. "Order" usually just means ensuring the people who own the building don't lose their lunch money to the newcomers.

Who specifically gets to sit in the room and decide to hit the button?

It’s a cozy committee of the very people who stand to lose. While some "circuit breakers" are automatic, the most controversial halts are decided by exchanges and clearing houses behind closed doors.

These clearing houses are the financial world's plumbing. When the pipes burst because too many "little guys" are winning, they turn off the main valve to save their own liquidity.

It’s like a referee who also banks for the losing team. They don't need a fair reason; they just need to stay solvent before the sun comes up.