There are a number of memorable events this week in finance, but the headline belongs to the Oracle of Omaha, now an octogenarian. We'll look at that and much more this week. (Missed last week's article? Check out Wall Street History: The Boesky And Siegel Deal.)

IN PICTURES: 6 Ways To Save Money This Summer

80 Years Young
On August 30, 1930, Warren Buffett was born in Omaha, Nebraska. The landmarks of Buffett's stories are well known today - tutelage under Benjamin Graham, a meeting with Charlie Munger, the purchase of a textile mill - and they all add up to the world's largest fortune built by stock picking. Buffett is worth nearly $50 billion dollars - a big number. He's also 80 years old - not a small number. Buffett likely has very few items on his birthday wish list, but a competent successor is no doubt among them.

Reparations And Hyperinflations
On August 31, 1921, Germany paid its first million marks in reparations, causing the value of the mark to plummet 30%. This was the start of the German hyperinflation. Germany's solution to make the payments was to print more and more marks, setting off massive inflation. This viscous cycle ruined many Germans, pushing them to call for radical political changes and helping Hitler's sweep to power.

In one of the great "I told you so" moments in history, John Maynard Keynes predicted the reparations system leading to another all-out war of even larger proportions. But no one really listens to economists unless it's something they want to hear.

Great Fire Brings Insurance Inland
On September 2, 1666, the Great Fire of London broke out and burnt for three days, destroying 10,000 buildings including St. Paul's Cathedral. The event was so catastrophic that many businesses began seeking insurance. Insurance had been around for a long time, but it was largely aimed at covering risky ventures from storms, pirates and the occasional bad navigators. With a large demand for fire insurance, the marine insurers began selling dry land policies. (To learn more, see The History Behind Insurance.)

The Treasury Department is Formed
On September 2, 1789, the U.S. Treasury came into being. The first secretary of the Treasury was Alexander Hamilton. Broadly speaking, Hamilton laid the foundation for the nation's financial system from the minting of money to the setting of duties on imports to fund government. Hamilton was far from flawless, but his strong guidance stabilized America as a nation and gave foreign investors confidence in the value of American bonds. This inflow of foreign capital helped the U.S. rebuild after the Revolutionary War.

Let There Be Light
On September 4, 1882, the Edison Electric Illuminating Company started up its first electrical plant to distribute electricity in New York's shopping and financial district. The Pearl Street generator started as a novelty act, lighting up shop fronts with electric lights. Soon, however, appliances running off electric motors began to appear. The electrical revolution added to the breakneck pace of innovation that carried the U.S. to the forefront of the world. After being bought up at the turn of the 20th century, Edison Electric Illuminating Company is now known as Consolidated Edison.

Bailout Buyout
Remember when JPMorgan bought out Bear Stearns with the government's blessings? On September 5, 1988 a very similar situation unfolded in the savings and loan crisis as it did in the mortgage meltdown. On this day, the Robert M. Bass group bought up (read, bailed out) the American Savings and Loan Association with $2 billion worth of government aid. The company cost Bass less than half a billion of its own capital. American S&L Association was split in two - echoes of good GM and bad GM - with the good assets going to Bass and the rest into a resolution entity.

The overall S&L bailout was considered a huge burden on the taxpayer at over $120 billion. If only we could pull out of the mortgage crises and the Great Recession with that small of a bill. Fannie and Freddie alone are expected to cost $160 billion plus possible ongoing expenses (the extreme estimate out now is $500 billion). (To learn more, see Top 6 U.S. Government Financial Bailouts.)

That's all for this week. Next week we will look at Jack Welch, Chrysler's first bailout and much more.

Catch up on your financial news; read Water Cooler Finance: The Ups And Downs Of A Double-Dip Recession.

Related Articles
  1. Stock Analysis

    The 5 Best Stocks That Pay Monthly Dividends (PSEC, LTC)

    Get the scoop on five of the best stocks that pay regular monthly dividends, offering investors looking for regular income dividend yields of up to 16%.
  2. Stock Analysis

    If You Had Invested Right After Berkshire Hathaway's IPO (BRK.A)

    Learn how much you would now have if you had invested right after Berkshire Hathaway's IPO, and find out the classes of shares that you could invest in.
  3. Economics

    The History of Stock Exchanges

    Stock exchanges began with countries who sailed east in the 1600s, braving pirates and bad weather to find goods they could trade back home.
  4. Economics

    How Warren Buffett Made Berkshire A Winner

    Berkshire Fine Spinning Associated and Hathaway Manufacturing Company merged in 1955 to form Berkshire Hathaway.
  5. Fundamental Analysis

    3 Long-Term Investing Strategies With Strong Track Records

    Learn why discipline and a statistically valid investment strategy can help an investor limit losses and beat the market over the long term.
  6. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
  7. Investing News

    What Does the Fire Monkey Mean for Your Portfolio?

    The Chinese new year this year corresponds to the monkey, a quick-witted, playful, tricky figure that means well but has a penchant for causing trouble.
  8. Mutual Funds & ETFs

    The 3 Best Vanguard Funds for Value Investors in 2016

    Find out which of Vanguard's value funds are the best for building a solid core-satellite value investing strategy for your portfolio.
  9. Mutual Funds & ETFs

    The 5 Best US Small Cap Value Index Mutual Funds

    Find out which index mutual funds do the best at investing in small-cap value stocks for higher potential returns at the lowest cost.
  10. Retirement

    Warren Buffett's Investment Lessons for Retirees

    For those in retirement, Warren Buffett's clear, timeless advice on investing is worth a look.
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  3. Have hedge funds eroded market opportunities?

    Hedge funds have not eroded market opportunities for longer-term investors. Many investors incorrectly assume they cannot ... Read Full Answer >>
  4. What is the average return on equity for a company in the retail sector?

    The retail sector includes automotive; building supply; distributors; general; grocery and food; online; and special lines ... Read Full Answer >>
  5. What is the average price-to-book ratio of companies in the retail sector?

    The retail sector includes seven types of retail companies: automotive; building supply; distributors; general; grocery and ... Read Full Answer >>
  6. Are companies with high Book Value Of Equity Per Share (BVPS) takeover targets?

    Companies with high book value of equity per share (BVPS) can be good takeover targets if those companies are public and ... Read Full Answer >>
Trading Center