1973: The International Business Machines Corp. is fined $150,000 a day by Federal District Court Judge David N. Edelstein for contempt of court. IBM, which is being sued by the U.S. Department of Justice for violating federal anti-trust law, refuses to turn over sensitive documents requested by the government, claiming that they would give its competitors unjustified access to IBM's business secrets. Judge Edelstein deliberately sets the fine at $150,000 -- an estimated 5% of IBM's daily profits.
1981: At one minute past midnight, a new cable TV channel begins broadcasting. It shows a non-stop diet of music videos, specializing in fast editing cuts, murky lighting, and miniature melodramas. The channel is called MTV, and it gives a huge jolt of youth potion to the faltering recorded-music business around the world.
1897: Looking for a remedy for his father’s rheumatism, a young German chemist named Felix Hoffman synthesizes a stable form of acetylsalicylic acid in a laboratory in Berlin. The head of Bayer’s pharmacological institute, Heinrich Dreser, lambastes Hoffmann’s discovery as “typical Berlin hot air; the product is worthless.” Bayer soon names the product “aspirin,” and it becomes the best-selling drug of all time.
1945: As Allied air raids reach a crescendo, Japan’s stock exchanges close down; trading will remain suspended until 1949.
1971: Socially responsible investing comes out of the counterculture and goes mainstream. Pax World Fund, the first broadly diversified mutual fund to invest in companies based on social and environmental criteria, is launched in Washington, DC, by Luther Tyson and Jack Corbett. Liberal Democrats can finally act like capitalists without having to blush.
1987: The Wall Street Journal reports where eight investing experts think the stock market is headed. Greta Marshall, chief investment officer of the California Public Employees Retirement System, forecasts that “overvalued markets can become substantially more overvalued.” Technical guru Joe Granville, who “called” the bear market of 1981-1982, foresees “the bull market running at least another year.” Just two months from now, the bull market collapses in the worst crash since 1929.
1928: Accepting the Republican presidential nomination, Herbert Hoover declares: “We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poorhouse is vanishing from among us…. We shall soon, with the help of God, be in sight of the day when poverty will be banished from the nation.” Unfortunately, just over one year later, the Great Depression arrives, proving Hoover tragically wrong.
1950: Steve Wozniak, future co-inventor of the Apple computer, is born.
1987: Alan Greenspan takes office as Chairman of the Federal Reserve Board.
1992: You can tell what a society was like by its biggest monuments: Rome had its Coliseum, Egypt its pyramids, China its Great Wall. Today, the U.S. gets a monument sure to puzzle future archeologists, as the world's largest shopping center, the $650-million, 4.2-million-square-foot Mall of America, opens in Bloomington, Minn.
1920: Charles Ponzi is arrested for financial fraud in Boston after taking in more than $6 million from thousands of investors. He repaid each $1,000 invested with $1,500 just 90 days later--but only by taking more money from newcomers or, as a judge later puts it, “robbing Peter to pay Paul.” Such pyramid arrangements are forever afterwards known as “Ponzi schemes.”
1930: Clarence Birdseye is awarded a U.S. patent for the invention of packaged frozen food.
1932: After losing nearly 90% of its value since the market peak just three years earlier, the Dow Jones Industrial Average adds insult to injury, losing 8.4% of its value in a single day -- the six-worst percentage loss on record. The index drops 5.79 points to close the day at a miserable 63.11 -- roughly the level the index had been at in 1907.
1981: The PC hits the mainstream as IBM introduces its “Personal Computer,” which for a list price of $1,265 comes with a whopping 16 kilobytes of user memory and 40 kilobytes of ROM with Microsoft BASIC. For just $90 more, you can expand the memory by another whole 16 kb.
1982: In a fitting sign of the times, two brokerage firms -- Lombard-Wall Inc., a government bond dealer, and Colin, Hochstin Co., a marketmaker in small stocks -- go bankrupt on the same day. The Wall Street Journal quotes Gary Fragin, head of stock trading at Oppenheimer & Co., saying that “it appears that the market will have to go lower before we’ll see a sustained rally, because each time it has tried to rally recently there hasn’t been any followthrough.” The Dow Jones Industrial Average closes the day at 776.92, or 218.23 points below its last record high of Feb. 9, 1966. The very next day, one of the greatest bull markets of all time begins.
1979: BusinessWeek’s cover proclaims THE DEATH OF EQUITIES: “Only the elderly, who have not understood the changes in the nation's financial markets, or who are unable to adjust to them, are sticking with stocks.... the U.S. economy probably has to regard the death of equities as a near-permanent condition -- reversible some day, but not soon.... It turns out that this "near-permanent condition" will last three years to the day.
1981: Pres. Ronald Reagan signs into law the Economic Recovery Tax Act of 1981, the biggest tax cut in American history, which streamlines the Federal income tax brackets, lowers the top rate to 36%, and creates the universally-deductible Individual Retirement Account.
1982: It's Friday the 13th, and one of the greatest bull markets of all time begins -- but no one believes it is happening. The Federal Reserve cuts its discount rate by a half-point to 10.5%, and the Dow Jones Industrial Average jumps 11.13 points from the previous day's level of 776.92, closing at 788.05. Ronald Koenig of Ladenburg, Thalmann & Co., tells The New York Times that the Dow Jones Industrial Average "could drop to as low as the 730 to 740 level before any meaningful recovery takes place." Kenneth G. Catanella of E.F. Hutton & Co. tells the Wall Street Journal that the market is in the grip of “outright capitulation and panic selling by both large and small investors.”
1935: The Social Security Act is signed into law, assuring some retirement income for all working Americans. Payroll taxes are set at 1%, for both workers and employers, on the first $3,000 of earnings.
1929: Leonard P. Ayres of Cleveland Trust Co., one of the nation’s leading business economists, declares: “This is truly a new era in which formerly well-established standards of value for securities no longer retain their old significance.” Like most people who have declared any period to be a “new era,” Ayres turns out to be wrong, as two months later the stock market crashes, ushering in the Great Depression.
1971: Alarmed at inflation, which is running at roughly a 4.5% annual rate, President Richard M. Nixon issues an executive order declaring a 90-day freeze on wages and prices. "Every action I have taken tonight," declares Nixon in a televised speech, "is designed to nurture and stimulate competitive spirit, to help snap us out of the self-doubt….as we blaze the trail toward the new prosperity." Within three years, inflation is at a record 12.2% and the nation is in the worst recession since 1929.
1982: Wall Street is a wreck, reports The New York Times in a long, grim autopsy called "Dark Days on Wall Street." The article warns: "In the past two weeks, all the market averages have plunged to new lows as Wall Street, beset by cruel economic news from all sides, has time after time been unable to mount a sustained rally. That is a discouraging omen, an indication that the bottom has not been reached, many securities analysts say, and a sign that even the most steel-willed optimists may be about to throw in their towels…. 'Nobody can tell if we're starting a depression or ending one,' said a mutual fund manager who asked to remain anonymous. 'The market is one giant gamble.' " Unfortunately for people who believe what they read in newspapers, one of the greatest bull markets in history has begun -- just two days earlier. The nightmare is already over, but no one has realized it yet.
2000: The U.S. Securities & Exchange Commission adopts Regulation FD (for "Fair Disclosure"), which prohibits public companies from leaking material information to selected analysts without letting the general public know at the same time. Wall Street reacts with howls of indignation, but in the end Regulation FD actually forces at least a few analysts to try something new: actually analyzing the companies they supposedly have been studying all along.
1922: The nation's first "toll station," or commercial broadcaster, opens as AT&T launches its WEAF radio station in New York City. "Radio Dealer," a leading trade publication, denounces AT&T for its "mercenary advertising purposes," predicting a "man-sized vocal rebellion" among the users of free air time. A 10-minute block of air time on WEAF costs $50, and nearly two weeks passes before anyone buys any. But soon after, ads are everywhere on radio.
1982: The Wall Street Journal reports that Richard I. Sichel, a respected portfolio manager at New Jersey National Bank, is keeping 30% of his equity funds in cash and considers high-grade bonds “the best investment.” Warns Sichel: “There’s still room for disappointment on corporate earnings and the [Dow Jones] industrial average might hit the low 700s.” The Dow closes the day at 792.43, never comes near the low 700s again, and finishes the year at 1046.54.
1802: In one of history's greatest acts of inventive daring, Robert Fulton launches his new steamboat from the north shore of Manhattan. The craft, nicknamed “Fulton’s Folly,” is unfinished, since Fulton has run out of money. With its Boulton & Watt steam engine belching smoke, it looks like “a backwoods sawmill mounted on a scow and set on fire.” Fulton has tested it on just a single two-mile run, but he lures 40 friends and relatives on board and chugs all the way to Albany and back, covering 300 miles in 62 hours -- an astounding pace of nearly 5 mph. By March, 1850, the Scientific American declares: “Where the steamboat goes, there the wilderness disappears.”
1896: Two Tagish Indians named Skookum Jim and Tagish Charlie, along with a Californian named George Carmack, are scrabbling for gold in Rabbit Creek, a tributary of the Klondike River near Skagway, Alaska. They suddenly come up with a pan chock-full of gold nuggets and rechristen the stream “Bonanza Creek.” The Alaska Gold Rush is on.
1982: Salomon Bros.' chief economist, Henry Kaufman -- known as "Dr. Doom" for his bearish forecasts -- suddenly turns bullish, declaring that interest rates are likely to fall significantly. Wall Street goes bonkers, with the Dow Jones Industrial Average gaining 38.81 points, or 4.9%, one of its largest daily leaps ever. Trading volume is a near-record 92.86 million shares, and winners outnumber losers on the New York Stock Exchange by ten to one. Just two days after The New York Times reported that Wall Street was in a state of despair, the great bull market of the 1980s is underway in high spirits and at dazzling speed.
1998: The Russian government devalues the ruble and declares a moratorium on paying its foreign debt, a de facto default that sends the global bond markets crashing, triggers the collapse of the giant U.S. hedge fund Long-Term Capital Management and sends shockwaves through the world's financial system.
1982: As a bull market suddenly materializes out of nowhere, daily trading volume on the New York Stock Exchange exceeds 100 million shares for the first time, with 132,681,120 shares changing hands.
1871: Orville Wright is born in Dayton, Ohio. At age seven, he starts playing with a flying toy made of cork, bamboo and rubber bands; in 1903, he and his brother Wilbur make the world’s first sustained airplane flight.
1883: Jeanne Gabrielle Chanel is born in Saumur, France, the illegitmate daughter of Albert Chanel, an itinerant peddler, and Jeanne Devolle. Later known as “Coco,” Chanel overcomes her shabby past and becomes the most elegant and powerful force in the world’s fashion industry.
1906: Philo Taylor Farnsworth, the future inventor of television, is born in a remote log cabin in Utah.
1983: The Washington Public Power Supply System, which has funded the construction of five nuclear power plants in the Pacific Northwest, defaults on $2.25 billion in municipal bonds -- although its bonds are rated investment-grade by the credit agencies. Forever after, WPPSS is pronounced “WHOOPS” by bond investors.
2004: In the most eagerly anticipated initial public offering in years, Google Inc.’s stock begins trading. After refusing to let Wall Street underwriters pull their usual stunt of charging fat fees to price the stock too cheap, Google conducts a rare “Dutch auction” in which bidders (including individual investors) compete to create the price at which all shares can be sold. Initially priced at $85, the stock opens for trading at $100 a share and closes at $100.335 on volume of 22.4 million shares. Although most investment bankers jeer, the IPO is a success.