Reasonably Priced Business Computer (IBM/360)

The IBM/360 is the first mass computer, designed as a general-purpose computer affordable for mid-sized businesses yet powerful enough for large enterprises. Background In 1962, IBM’s revenue was $2.5 billion. CEO Thomas Watson Jr. believed in the vision of a general-purpose computer that supports timesharing, the ability of a computer to do multiple things at […]

Long-Term Mortgages

Mortgages are loans to purchase a property. The word derives from the French “mort” and meant death pledge with the obligation ending when the loan was paid off or the property repossessed. Background The Dutch have the earliest mortgages. Originally in the Netherlands, people saved money and purchased their house for cash. However, starting in […]

Margin Lending

Early History Building early railroads was an expensive undertaking and Americans were short liquid capital in the mid-1800s. To finance businesses in the early 1800s, people typically turned to broker Nicholas Biddle of Philadelphia who marketed sterling bonds from the UK. This funding mechanism dried-up with the failure of the Bank of the United States […]

Easy Credit

Background Cyrus McCormick’s mechanical reaper revolutionalized agriculture. McCormick’s reaper enabled one man to harvest the same amount of grain in one day as he could in two weeks by hand. Since grain goes bad when not timely harvested, the reaper enabled farmers to plant far larger crops with commensurate profits. Additionally, the reaper lowered the […]

Central Banks

Background The first central bank was Swedish Riksbank. The Swedish government chartered it to act as a clearinghouse for commerce. In 1694, the Bank of England was founded. It’s primary purpose was to purchase government debt. Napoleon chartered the Banque de France to stabilize currency after the French Revolution. Early central banks, and their modern […]

Options & Futures

“I’ll gladly pay you Tuesday for a hamburger today,” cartoon character Wimpy Wellington repeatedly offers. If he worked as an options trader he’d probably say “I’ll gladly pay you 1/10th the price of a hamburger today if I can buy a hamburger, sometime in the next year, at the price they are today.” You’d answer: […]

Multinational Corporation

A Nightmare, in Real Life Picture the entire Fortune 500 combined into one large company. The company manufactures everything imaginable with monopolies in cotton, silk, dyes, salts, spices, and tea. Not only do they have near-monopolies in gunpowder but also weaponizes opium, giving away free samples to encourage dependency. Basically, their only moral is to […]

Electronic Stock Exchange (NASDAQ)

History In early stock markets, traders offered and accepted bids for stock prices to one another. People would stand in a stock exchange and literally yell out stock symbols and prices. Buyers would purchase blocks of stock. This system was slow and expensive. Only high-level bankers had access to the people on a stock trading […]