September 16

On September 16, 1908, William C. Durant and his partners officially established the General Motors Corporation in Detroit. Originally formed as a holding company for Buick, GM soon incorporated Cadillac, Oldsmobile, and other marques under its umbrella. The company's innovative management and assembly line techniques revolutionized mass production in the auto industry. By focusing on research, design, and global expansion, GM grew rapidly throughout the 20th century. It introduced iconic vehicles, fostered advancements in safety and engineering, and weathered economic challenges like the Great Depression. Today, GM remains a leading force in automotive development, electric vehicles, and autonomous driving research.

On September 16, 1992, the United Kingdom withdrew the pound sterling from the European Exchange Rate Mechanism (ERM) following intense speculative attacks. Despite raising interest rates and spending billions of pounds in reserves, the Bank of England could not maintain the fixed exchange rate against the German mark. George Soros and other speculators had heavily shorted the pound, betting on its devaluation. The currency's exit led to an immediate 15% drop in its value and cost the UK Treasury billions. Black Wednesday heavily damaged Prime Minister John Major's Conservative government and its economic credibility. However, the subsequent devaluation is credited with boosting the UK economy and exports in the years that followed.

Repurchase agreement rates spiked abruptly, with the overnight cost of secured lending jumping past 8%. The sudden illiquidity puzzled investors and threatened to ripple through money markets. On September 16, the Federal Reserve announced open market operations to supply cash and calm rates. This intervention marked the Fed's first direct action in the repo market since 2008. Analysts debated factors such as corporate tax payments and Treasury settlements as root causes. The episode underscored the critical role of central banks in maintaining short-term funding stability. It foreshadowed broader market turbulence that would unfold amid the COVID-19 pandemic early in 2020.