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An Experiment in Chronology

The year 1990 in business and finance.

Big Picture: the two Germanies formally re-united, the Soviet Union tottered toward its end, Bush reached an agreement with Congress that raised taxes, despite his lip-reading pledge, and Secretary of the Treasury Nicholas Brady was still at work implementing an ambitious plan hatched the previous year to retire unpayable debts by undeveloped countries, i.e. the Brady Bonds plan.



Little Pictures: The following items may all have seemed mere details, but it is my contention that each imply important stories, and these small-picture stories help us understand why we are where we are even today.  But I'll make no effort to explain the significance of each as mentioned.

January: Time Inc. merges with Warner Communications to become Time Warner

February: The US Supreme Court decides REVES v. ERNST & YOUNG, struggling with the question of what is a "security" for reg purposes.

March: FASB issues a pronoucnement on the disclosure of information regarding off-balance-sheet risk. This would be superceded by FAS 133, eight years later.

April, two points

     a) Michael Milken pleads guilty to five counts of securities and tax law violations, one count of conspiracy.

     b) Basel Committee on Banking Supervision issues a Supplement to its 1983 Corcordat, aimned at improving the transfer of information among the banking regulators of different nations.

June: Three points

   a) Enron hires Jeffrey Skilling to head the Enron Finance division.

    b) NASD establishes OTCBB, an electronic quotation medium for small-cap securities

     c) A task force of the FASB issues EITF 90-15, representing the first statement of the 3 percent rule for the nonconsolidation of off book entities.

July: full liberalization of cross-border capital movement begins among the nations of Europe that would in time become the Eurozone

September: the Federal Reserve authorizes JP Morgan to underwrite stocks. It had not previously been involved in broker-dealer activities, because in 1933 Congress had forced the Morgan empire into two parts -- Morgan Stanley was the part that did the Wall Street stuff.

October: Two points

     a) President Bush signs into law the Penny Stock Reform Act.

     b) the members of both the CBOT and the CME agree to the creation of a joint venture, Globex Corp., to develop electronic trading .







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