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  • This day in financial history




    THIS DAY IN FINANCIAL HISTORY

    Learn what happened in business in today’s past



    October 08:


    1998: Amid the Asian financial crisis and the collapse of the Long-Term Capital Management hedge fund, the Dow Jones Industrial Average slides 10 more points to close at 7731.91, down 17% in less than three months. L. Keith Mullins, emerging-growth stock analyst at Salomon Smith Barney, says investors are in the grip of �wholesale panic,� and Ralph Acampora, technical analyst at Prudential Securities, forecasts that the Dow will soon drop to between 6500 and 7000. �This was history,� declares Paul Taylor, options strategist at 1010WallStreet.com. �This was the first true day of panic.� In fact, the very next day the Dow rises more than 160 points. One year later, the Dow is at 10649.76, a 38% gain.

    The Wall Street Journal, October 9, 1998, pp. C1, C2, C7, C11; http://www.djindexes.com

    1974: In an address to Congress, Pres. Gerald R. Ford declares war on inflation with the defiant slogan WIN or Whip Inflation Now. That day, the Dow Jones Industrial Average surges 4.6% on the good news that the plan will achieve, in the President's words, "a meaningful reduction in the rate of inflation" by early 1975. By year-end, inflation has risen to 12.2%.

    The New York Times, October 10, 1974, pp. 1, 38; http://www.djindexes.com

    1973: On the first trading day after the Yom Kippur War breaks out, as Israel is attacked by the neighboring Arab states and OPEC threatens an oil embargo, the Dow nevertheless rises by nearly 1% to close at 977.65. Over the next year the market will �learn� that it was wrong, as stocks lose 38% of their value.

    John A. Prestbo, ed., The Market's Measure: An Illustrated History of America Told through the Dow Jones Industrial Average (Dow Jones, New York, 1999), p. 82; http://www.djindexes.com

    1956: The earliest enclosed multi-level shopping mall, sponsored by Dayton's department store (now Target Corp.), opens in the "village" of Edina, Minn., outside Minneapolis. Southdale Center, which cost $20 million, features 72 stores (including Bringgold Meat Co., Fanny Farmer Candy Shops, Slenderella International, and F.W. Woolworth Co.), and the nation's largest paved parking lot. What's more, "the temperature at Southdale is spring-like the year round," and the mall will "not only meet suburban needs, but will relieve some of the pressures on downtown." True enough: As shopping malls spread, the downtown shopping districts in most U.S. cities wither and die -- and the "shopping experience" is never the same again.

    Robert Shiller, "Just another superhighway," The Financial Times, August 1, 2001, p. 13; http://www.southdale.com/go/history.cfm?MallID=227 http://www.targetcorp.com/targetcorp.../history.jhtml

    1871: No, a cow does not kick over a lantern, but the barn behind Patrick O'Leary's cottage at 137 DeKoven St. bursts into flames that swiftly spread to engulf almost four square miles in the heart of Chicago, destroying the entire downtown overnight. Real estate prices explode, capital pours into the city, and Chicago is reborn as the �city of the big shoulders,� with skyscrapers of brick and stone.

    William Cronon, Nature's Metropolis: Chicago and the Great West (W.W. Norton & Co., New York, 1991), p. 345; Charles P. Kindleberger, "The Panic of 1873," in Eugene N. White, ed., Crashes and Panics: The Lessons from History (Dow Jones-Irwin, Homewood, Ill., 1990), p. 81.

    1831: The Panic of 1831 breaks out, as revolution and cholera in Europe slash imports and a rash of excess lending by U.S. banks sets off inflation. Very urgent demands for money were heard says historian Clement Juglar."

    Clement Juglar, A Brief History of Panics and Their Periodic Occurrence in the United States (G.P. Putnam's, New York, 1916; reprinted, Fraser Publishing Co., Burlington, VT, 1993), p. 57.

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