On an October morning 25 years ago, MarketWatch started providing real-time news and market data to the general public on the internet. Individuals were fleeing their stockbrokers for new online platforms, like E-Trade and Charles Schwab, and hungry for financial data and information that did not cost upwards of $10,000 annually to access.
1. Online brokers and the rise of the day trader The internet and the discount brokerage model combined in the late 1990s to unleash a powerful new force on financial markets that was led by E-trade and Charles Schwab SCHW . By 1998, million of Americans had moved their retail trading activities online, reshaping Wall Street forever.
But it all went awry in August 1998 as Russian markets imploded after Moscow devalued the ruble, defaulted on domestic debt and declared a moratorium on payments to foreign creditors. LTCM’s highly leveraged exposure to Russia resulted in the hedge fund’s collapse, with the Federal Reserve coordinating a then-historic $3.6 billion bailout led by the fund’s creditor banks.
Other Wall Street analysts told Wired that MarketWatch was a “scrappy company” that unlike a newspaper “won’t have to contend with newsprint, delivery trucks, unions, and other messy expenses.” Subsequent rule changes, culminating in what the SEC deemed the “National Market System,” had a similar effect, speeding technological trends that had been decades in the making while aiming to create a freewheeling market where exchanges and other venues, including electronic communications networks and so-called dark pools, would compete to provide best execution on trades.
The human tragedy of 9/11 was overwhelming and the terrorist attack on the World Trade Center and Pentagon also clearly targeted financial markets and the people who worked to keep them functioning. U.S. markets did halt trading on 9/11 and the New York Stock Exchange would stay closed for four trading days, the longest period it had sat empty since 1933, during the height of the Great Depression.
6. The Enron scandal On December 2, 2001, Enron filed for bankruptcy court protection. At the time, it was the biggest corporate failure in American history and symbolized the excesses that had taken place in financial markets. A Houston energy and trading company, Enron had started 2001 as the nation’s seventh largest company with $100 billion in reported revenue and a high-flying stock before collapsing amid accusations of accounting fraud.
In response to the Enron scandal, federal lawmakers passed the Sarbanes-Oxley Act, requiring sweeping new accounting and recordkeeping practices for corporations. Three years later, MarketWatch ran the following headline: “Andersen’s Conviction Overturned.” As MarketWatch told it, in a unanimous decision written by Chief Justice William Rehnquist, the the Supreme Court said “the jury instructions were flawed in important respects.
By March 2007, many American homeowners were unable to make their mortgage payments. Housing prices fell. Ben Bernanke argued that the problems associated with subprime loans were “contained.” MarketWatch reported that the Federal Reserve chairman at the time saw limited impact from subprime. “We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial systems,” MarketWatch reported Bernanke saying.
“This is a revolutionary product that has the chance to really impact people’s lives,” Jobs told Jon Swartz, now a MarketWatch Silicon Valley correspondent. Jobs compared the iPhone to the original Macintosh and iPod. “This is the ultimate digital device.” Lehman Brothers collapsed under the weight of souring real estate assets, sending shockwaves across the world and sparking a financial crisis. Within hours of the bankruptcy filing, one of the biggest money market funds was forced to “break the buck,” unable to fully pay its investors because of the Lehman Brothers commercial paper it held. MarketWatch reported how the Reserve Primary Fund “put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1.
The true identity of Satoshi Nakamoto remains a mystery, but the technology he introduced has had a profound impact on markets. Bitcoin BTCUSD popularized the idea of digital currencies powered by distributed software known as blockchain. There are now more than 12,000 digital currencies with a combined market capitalization of nearly $2 trillion. Bitcoin is still the most widely traded and highly valued.
You could’ve named number 25 Joe Biden and the democrats. Could’ve also noted that inflation is following the path of oil which took off just after Biden initiated war on American oil.
Happy anniversary!