Macro

Major banks raised the prime lending rate to an unprecedented 8.5%. The record cost of credit squeezed corporate borrowers, crushed housing finance and signaled that the Fed's anti-inflation campaign would not spare Wall Street.

Economy slips into recession, short-term rates century-high

Recession onset; century-high short rates freeze deals

Recession begins, short rates at century highs, financing squeezed

On the last business day of the Johnson administration, the DOJ sued IBM for monopolizing the computer market. The suit hung over the dominant technology stock of the era for 13 years and shaped how the entire computer industry priced, bundled and competed.

economy slips into recession, prime rate records

Fed's aggressive tightening and record 8.5% prime raised auto financing costs while accelerating inflation eroded real consumer incomes; the economy slipped into recession by December, souring big-ticket and discretionary demand.

Recession begins; advertisers turn cautious into 1970

Phillips Petroleum announced the Ekofisk discovery, the first giant oil field found in the North Sea. The find opened a major new non-OPEC petroleum province whose strategic value would soar after the 1973 embargo.

The January Santa Barbara blowout fouled the industry's image and spurred the coming environmental/EPA regime; otherwise domestic prices were regulated and stable, so an owner felt mild unease more than pain, with December's Ekofisk discovery hinting at future supply.

Economy slips into recession; base-metals and chemicals orders soften

High-flying acquisitive conglomerates such as Litton, LTV and Gulf+Western fell sharply as earnings-per-share arithmetic built on pooling accounting and cheap paper unraveled amid tight money. The bust ended the 1960s merger wave and wiped out a signature theme of the go-go bull market.

Economy tips into recession; orders soften

NASA achieved the lunar landing, the culmination of a decade of massive aerospace spending. For markets the triumph marked a peak: NASA budgets were already shrinking, and aerospace and defense employment and stocks began a painful contraction.

Vietnam procurement was still fat but past its FY68 peak, Nixon's June Vietnamization and first troop withdrawals signaled a drawdown, and the C-5A cost-overrun testimony darkened Lockheed's book;

As a defensive drug and hospital owner, steady demand plus the ramping Medicare/Medicaid tailwind kept my P&L intact even as the Fed's credit crunch crushed the broad market; my worry was only the December recession onset, not my own sales.