Did you know? You can go to any day’s “This Day in History” page by simply entering the month and date after www.begintoinvest.com/
For example: www.begintoinvest.com/May-9
Or follow Begin To Invest on Twitter or Facebook for daily posts!
Prefer video? These are posted daily on our YouTube Channel (and embedded below)
Now, ‘This Day in History’ is also available as an Amazon Alexa Flash Briefing!
Quote of the Day
“Financial professionals, policymakers, and the general public do not pay enough attention to financial historians when times are good. When times are bad, the stock of financial historians does increase but then it is too late to do much good.”
-Robert Wright, author of Genealogy of American Finance
January 7th – This Day in Stock Market History
January 7th, 1782 – The Bank of North America, the first commercial bank in the United States, opens its doors.
The bank would become the de facto central bank for the United States until the First Bank of the United States took over in 1791.
The bank would not only be the first commercial bank open in the United States, it would also be the first company to have its IPO in America. The bank sold 1,000 shares at $400 per share, with notable investors such as Ben Franklin. The largest shareholder of the bank would be the United States Government, who purchased 63% of the bank’s shares.
The bank would go through a number of mergers through the centuries, and would eventually become part of Wachovia Bank, which is now part of Wells Fargo.
January 7th, 1907 – The Dow Jones Industrial Average reaches its high for the year. Over the next 11 months, the U.S. stock market would fall more than 45% as the Panic of 1907, also known as the ‘Knickerbocker Crisis’, unfolds.
In total, the Dow would finish the year down 37%, it would be the worst annual performance for the index in its history at the time, and even today is still the second worst year in the Dow’s history. (1931 is the worst, with a -52.7% return.
January 7th, 1980 – President Jimmy Carter signs legislation to provide the auto company Chrysler with $1.5 billion in guaranteed loans.
At the time, it would be the largest bailout of a private company by the government in history.
The history of the Chrysler bailout resurfaced as the financial crisis in 2008 worsened and General Motors declared bankruptcy.
Here are a few good pieces for those looking for more into the Chrysler bailout:
NPR – “Examining Chrysler’s 1979 Rescue”
ThoughtCo – What was the Chrysler bailout?
American Presidency Project – Transcript of Jimmy Carter signing the law
Best January 7th in Dow Jones Industrial Average History
2000 – Up 2.39%, 269.30 points.
Worst January 7th in Dow Jones Industrial Average History
2009 – Down 2.72%, 245.4 points.
Read of the Day
What Financial History Can Teach Advisors –
“Most financial professionals pay too little attention to financial history, which ought to instruct them. In the wake of the recent crisis, a good number of them became more interested in financial history for the perspectives it shed on what had happened, and some even advocated more study of it. The CFA Institute has been studying ways of adding more financial history to its educational programs for finance professionals. But as the crisis fades in memory, finance professionals talk less and less about history’s importance. Its cautionary lessons might interfere with taking the next big risk to make the next fast buck. One of the great lessons of financial history is that a lot of finance professionals over the decades and centuries never learn, and so they repeat the mistakes of the past.
The general public ought to learn more financial history to protect themselves from short-sighted finance professionals!”