A Day of Avoidable Disasters
On this day in economic and financial history ...
On Jan. 13, 2012, the cruise ship Costa Concordia ran aground on a shallow reef near the coast of Tuscany. More than 4,000 people, many at dinner in the dining hall, were on board as the ship began to list dangerously onto its port side. A series of grave errors both preceded and followed the grounding, and by the time the final evacuation order was given, the ship had tilted to the starboard side with such rapidity that normal lifeboat launches proved nearly impossible. By the time the dust cleared, 32 people were dead, and a 114,000-ton ship valued at more than $500 million was irredeemably lost. It was the largest passenger ship ever capsized.
The cruising industry reacted swiftly to the accident, implementing 10 new safety procedures within a year. However, Carnival , the owner of Costa Concordia's line, fell to a loss for the quarter the ship ran aground, and faces a number of lawsuits from both passengers and Italian businesses affected by the disaster. The Costa wreck was described as "the most expensive shipwreck ever" at the Costa Crociere line's shareholder meeting, as compensation requests may add up to over a billion dollars.
Meat-like byproduct: It's what's for dinner!
Americans had to put up with some strict rationing rules during World War II, but one such rule, implemented on Jan. 13, 1943, took things a step into the absurd. That day, the Office of Price Administration's Meats Division announced that hot dogs would thenceforth be replaced by "Victory Sausages," which were chiefly composed of "an unspecified amount of soybean meal or some other substitute." The patriotic branding earned some derision from commenters who pointed out the similarities to World War I's "victory cabbage," otherwise known as sauerkraut when America wasn't fighting the Kaiser.
Oscar Mayer, which was acquired by General Foods in 1981 and then combined with Kraft (now Mondelez ) as a result of Altria's megamerger with General Foods in 1989, was one of the country's largest hot-dog makers at the time, and it remains so to this day. Since other meat-like products such as bologna and cold cuts were also on the chopping block, the company had a great deal less to offer the public for the duration of the war.
The measure was intended to conserve precious meat supplies, and an OPA executive told meat packers that "there is no escape from it ... the federal government will have to make and enforce arbitrary sausage formulas." This is kind of funny, since "arbitrary sausage formulas" could describe most non-victorious hot dogs just as easily. The executive also noted that other meat-extending materials were under consideration, as well as soybean meal, cracker meal, potatoes, and "animal glands not commonly used for food." Mmm, glands! Tastes like victory.
A hallowed order
The Knights Templar have a strong hold on the collective Western mythmaking imagination. Without a papal sanction, issued on Jan. 13, 1128, the organization might have never grown to assume that role. The sanction established the Templars as a charity in Christian territories, which allowed them to accept donations. The Templars innovated early forms of banking to handle their growing fortunes as donations poured in from new members (who were forced into vows of poverty) or from well-off Crusaders and other pilgrims. Some of the earliest examples of credit can be found in recovered Templar documents. By midcentury, the Templars' role had shifted from safeguarding pilgrims to safeguarding valuables, which made the organization a source of reverence -- and a target.
The Templars fell into ruin in the 14th century. French King Philip IV, deeply indebted to the Templars, ordered the mass arrests of many Templar leaders across France on Friday the 13th of October in 1307. With the pope's support, Philip worked to have Templar assets seized and the order disbanded, which occurred in 1312 by papal edict. The sudden disbandment of a sprawling, wealthy organization has given us no shortage of gripping stories and entertaining theories over the years, as imaginative sorts try to explain what became of the Templars after the organization was broken. True to its banking legacy, most of the Templar stories and theories tend to paint the organization as a shadowy, cunning, manipulative group bent on world domination. The most popular of these stories in recent memory are Dan Brown's The Da Vinci Code and Ubisoft's Assassin's Creed series.
The end of an era
On Jan. 13, 2000, after 25 years at the helm, Bill Gates stepped down as the CEO of Microsoft , passing the baton to former college classmate, Steve Ballmer. Shares of Microsoft, then the world's largest public company, dropped 4% in after-hours trading when the news broke. The two men were worth more than $100 billion combined, with Gates' fortune valued at nearly $85 billion.
Gates' resignation was one of the most perfect examples of leaving at the top of your game in history. Microsoft had been added to the prestigious Dow Jones Industrial Average only two months earlier. Its market value had surpassed $600 billion by the end of 1999 and was at $550 billion at the time of Gates' announcement. The dotcom crash was imminent, but Microsoft was still riding high on the dominant share of its Windows operating system.
Gates remained at Microsoft until 2008, when he stepped down from full-time work to concentrate on his nonprofit foundation, the largest such entity in the world. Between the time of Gates' stepping down and the time of his retirement, Microsoft's stock declined by 35%, even as net income doubled. Despite that decline and the donation of billions to his foundation's causes, Bill Gates was still worth more than $50 billion a decade later.
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