The Dow's Christmas Bonus and a New Satellite Economy

On this day in economic and financial history...

Merry Christmas from space! That was the essence of a message relayed by Project SCORE, the world's first communications satellite, which reached orbit on the back of an Atlas rocket on Dec. 18, 1958. President Eisenhower, whose recorded greeting to the world was stored on Project SCORE's tape recorder, received news of the successful launch at a diplomatic dinner that evening and took the opportunity to proclaim: "This launching constitutes a distinct step forward in space operations. The success opens new opportunities to the United States and all mankind for activities in outer space."

Within a decade, men would be orbiting the Earth and approaching the Moon. Communications satellites continued to go into space at an increasing rate. By 1962 AT&T (T 1.88%) would successfully launch the first privately owned communications satellite, called Telstar, which provided the world's first live transatlantic TV feed.

Today, there are more than 1,000 operational satellites orbiting the earth, according to the Union of Concerned Scientists' database. The U.S. operates 443 satellites, including 197 commercial satellites. DIRECTV (DTV.DL) presently operates 10 satellites; EchoStar (SATS 3.79%) operates 11; Globalstar (GSAT -1.54%) maintains a fleet of 46 communications satellites; Iridium Communications (IRDM 1.88%) boasts a formidable space force of 71 satellites; ORBCOMM (ORBC) has 28 operational satellites; and Sirius XM (SIRI) has a comparatively small force of only nine satellites, including several launched before its merger. All of them owe Project SCORE a debt of gratitude -- and that little Sputnik doodad might deserve a bit of credit, too.

You're a mean one
On a lighter note, Dec. 18 has also seen the debut of one of the most popular Christmas specials. On Dec. 18, 1966, CBS (PARA -0.47%) first broadcast How the Grinch Stole Christmas! Unfortunately, this led to the creation of a 2000 film by the same name starring Jim Carrey. This awful movie went on to gross $345 million at the worldwide box office, while that other awful Jim Carrey movie based on a Christmas classic -- A Christmas Carol -- fell just $20 million short of that.

Holiday bounce
The Dow Jones Industrial Average (^DJI -0.11%) staged one of the largest rallies in its history on Dec. 18, 1931. The index rose 9.4% on the back of positive testimony from JPMorgan (JPM 0.49%) chairman Thomas W. Lamont, who appeared before the Senate Finance Committee to say that short-term German credit was not a danger to the American banking system. Predictably, banking stocks had some of the largest surges on the entire market. Lamont also supported wage cuts for railroad workers, which sent a number of rail stocks to big gains.

Among the major banking figures of his time, Lamont had been frequently and publicly proven wrong during the early days of the Great Crash, but the market seemed to believe him regardless. The Dow had slipped into double-digit territory a month earlier and lost 79% of its value. He also turned out to be very wrong about the soundness of the American banking system, which suffered an estimated 2,300 failures in 1931, another 1,450 in 1932, and a mind-boggling 4,000 failures in 1933. By the beginning of the following year, the Dow had already lost all of its gains from Dec. 18, 1931.