The Hunt Brothers’ Silver Corner — two billionaires who broke themselves cornering silver

Between 1973 and early 1980, the Texas oil heirs Nelson Bunker Hunt and William Herbert Hunt — with their younger brother Lamar and a group of Saudi partners — accumulated an extraordinary hoard of silver and silver futures, driving the metal from around $6 an ounce to a record $49.45 on 18 January 1980 before the position collapsed in the spring. The unwinding climaxed on Thursday, 27 March 1980 — “Silver Thursday” — when the price fell from $21.62 to $10.80 in a single day, leaving the brothers unable to meet a margin call estimated at $100 million and facing some $1.7 billion in losses.

The episode was not a faceless market mania like Tulip Mania or the South Sea Bubble but a deliberate attempt by two of the richest men in the world to corner a global commodity. By late 1979 the Hunts and their associates controlled an estimated 100 million ounces of silver and large futures positions — by some estimates a third of the world’s privately held supply, or roughly 70 percent of deliverable stocks. As prices soared, ordinary speculators piled in behind them and households melted heirlooms to sell, so that a private gamble became a public frenzy. The delusion was the belief that wealth and conviction could hold a corner indefinitely against the exchanges, the regulators, and the arithmetic of leverage.

The corner broke when the rules changed. In January 1980 the commodity exchanges, alarmed by the runaway market, imposed emergency limits — COMEX’s “Silver Rule 7” restricted buying on margin and the exchanges moved positions toward liquidation only. With new buying choked off, the price stalled, then reversed, and the Hunts’ heavily borrowed position turned against them with brutal speed. A consortium of banks arranged a $1.1 billion rescue loan to prevent a cascade of failures across Wall Street brokerages.

The aftermath was ruinous and slow. The Hunts spent the 1980s in litigation; in August 1988 a federal jury found them liable for conspiring to manipulate the silver market, awarding some $134 million to the Peruvian minerals firm Minpeco, and weeks later Nelson Bunker Hunt filed for bankruptcy. The case stands as the modern textbook example of a cornered commodity: a study in how leverage, concentration, and the conviction of very rich men collide with the limits of a market that can always change its rules.