Macro

Fed cuts discount rate to 6.5%; mortgage relief begins

Fed cuts discount rate 8% to 6.5%, relief

The 1,073-store variety chain collapsed under $1 billion of debt after years of reckless credit expansion, the largest retailing bankruptcy and second-largest US corporate failure to date. Its bank lenders took heavy losses, and the case became a landmark in credit analysis of cash flow versus reported earnings.

The Fed's January cut and Ford's March tax rebate revived spending and auto sales off the recession trough, though W.T. Grant's autumn collapse, the biggest US retail failure ever, marked the lingering carnage.

Fed cuts discount rate 8%→6.5%, easing credit for buyers

North Vietnamese and Viet Cong forces seized Saigon, renaming it Ho Chi Minh City, following the collapse of the South Vietnamese government and the withdrawal of U.S. personnel. The event marked the end of the Vietnam War and a major geopolitical setback for the United States, which failed to preserve its ally despite 14 years of military and financial investment. The Communist victory shifted regional power dynamics, signaling the reunification of Vietnam under socialist rule and impacting global Cold War alignments.

The April fall of Saigon symbolically closed the Vietnam procurement era with the book already at a low; strong foreign military sales kept the trough shallow rather than catastrophic.

After 183 years, the SEC ended the NYSE's fixed-commission schedule, forcing brokers to compete on price. Institutional rates collapsed immediately, weak firms merged or died, and the deregulation spawned the discount brokerage industry and the modern low-cost investing era.

The finance sector is in a weakened state this month, weighed down by clear signs of distress in regional banking and broad market devaluation. The 73% collapse in London's FT30 from its peak signals severe investor erosion and global financial strain, while Chemical Bank’s absorption of the troubled Security National Bank of Long Island reflects ongoing instability in the banking system. These events point to a bearish sentiment rooted in structural fragility rather than isolated incidents.

Ford's tax cut and Fed easing bottomed the recession by mid-year and the Dow surged 38%; ad spending recovered strongly in H2. Mood turns from negative to positive.

The Energy Policy and Conservation Act established a national crude stockpile, imposed auto fuel-economy standards, and extended domestic oil price controls with gradual decontrol. The law defined US energy policy for the rest of the decade, restraining domestic producers while building embargo insurance.

Energy sector sentiment is modestly bullish this month despite Venezuela’s oil nationalization move, which initially sparked concerns but had limited near-term supply implications. The broader backdrop of tightening global oil inventories and steady demand growth has underpinned prices, supporting the sector. Market focus remains on OPEC+ discipline and production trends in major exporting regions, tempering the impact of Venezuela’s policy shift.

The Treasury auctioned two million ounces of gold to blunt the import cost of newly legal private demand. Tepid bidding cooled the gold market's post-legalization froth and began official experiments with selling reserve gold that continued through the decade.

The raw materials sector turned bullish this month despite the symbolic bearish signal of the US Treasury’s first gold auction, which initially stoked concerns about waning institutional demand for the metal. However, broader commodity prices found support in tightening supply dynamics across base metals and renewed speculative interest in industrial raw materials, offsetting gold’s momentary headwind. Sentiment ultimately improved as market focus shifted toward inventory drawdowns and restocking demand in key industrial chains.

The 38% recovery rally lifted my valuations and, crucially, price controls had lapsed, restoring my drug-pricing power just as demand held firm through the recovery.

The Albuquerque startup licensed its BASIC interpreter for the Altair 8800, betting that software for microcomputers could be a business in itself. The firm would become the defining company of the personal-computer era and eventually the world's most valuable stock.

The tech sector is modestly bullish this month, driven primarily by the foundational event of Gates and Allen founding Microsoft to sell BASIC for microcomputers, a pivotal step in software commercialization for personal computing. This development signals the beginning of scalable software distribution, reinforcing confidence in tech's long-term growth trajectory. While still early, the move establishes a tangible milestone in democratizing access to computing tools.