What was going on when I was born?

Coach Red Holzman was forced to go to his bench early yesterday and to use players who have not produced recently. The move did not pay off immediately, but by the time the Knicks defeated the Houston Rockets, 122-106, at Madison Square Garden, Marvin Webster, Larry Demic, Randy Smith and Sly Williams had made major contributions to help end the team's four-game losing streak. The loss was only the Rockets' second in the last 12 games. Webster, who finished with 10 points, played 15 minutes of tough defense against Moses Malone, who nevertheless scored 30 points. With Maurice Lucas in early foul trouble, Demic guarded Elvin Hayes aggressively and forced him into an 8-for-20 shooting performance. Smith, playing the point guard for many of his 38 minutes, equaled his season high of 26 points, and Williams, missing only three shots in 13 attempts, scored 23 points.

The nation's governors today rejected the Reagan Administration's appeal to put their unhappiness with President Reagan's proposed budget out of their minds when they consider his ''new federalism'' proposals. But the Governors did agree to deal with those proposals without considering the overall problems of the economy, a tactic that some Democrats insisted Saturday was impossible. They also ruled out taxes and military spending as topics at the annual winter meeting of the National Governors Association. The decisions came on unanimous votes in a closed meeting attended by about 44 Governors. The participants also decided that, before their conference ends Tuesday, they would probably offer counterproposals to Mr. Reagan's suggestions for exchanging Federal and state responsibilities.

Consumers now look at cars more as transportation appliances than as an expression of their success in life, and this has made them more practical and intensely price-sensitive. That is the consensus that emerges from discussions with auto dealers attending the annual convention of the National Automobile Dealers Association here. The group has once again urged auto makers to convert their current rebates into permanent price reductions to stimulate sales. ''People see cars as things now,'' said Hugh Greer, owner of a Toyota-Subaru dealership in Wappingers Falls, N.Y. ''They come in and say, 'I'm going to keep this thing for 10 years.' There aren't many people anymore who plan to trade in their car every two or three years.''

Ice-skating in a lavish air-conditioned rink has emerged as a year-round fad in this desert emirate, where summer temperatures regularly soar to 125 degrees. Such extravagence befits a country where the area around the swimming pool of a luxury hotel is air-conditioned so sunbathers stay cool while tanning, exotically designed multimillion dollar villas sprout weekly along palm-lined boulevards and the per capita income has jumped to more than $20,000, about twice as much as in the United States. Lately, however, there are stirrings of trouble in Kuwait. After years of avoiding the problems plaguing less oil-rich economies, Kuwait is facing trade deficits and significant cutbacks in Government spending, and may have to dip into its financial surplus.

Mayor Koch will announce his candidacy for the Democratic nomination for Governor today, City Hall aides said yesterday. The scheduled announcement at a Gracie Mansion news conference comes after several weeks of speculation about Mr. Koch's intentions, fueled by the Mayor's public comments and reports of his private meetings with friends and advisers. Over the past several years, and as recently as last month, Mr. Koch said that he would never seek any office other than the mayoralty. In November he was overwhelmingly re-elected to a second four-year term running as a candidate of both the Republican and Democratic Parties. Last week, at the annual dinner of the Manhattan Republican organization, Mr. Koch said that, if he ran for Governor, he would not seek the Republican nomination.

Because of an editing error, an article Saturday on a proposed treaty between the united States and the European Economic Community misstated the membership of the community and of the North Atlantic Treaty Organization. Greece is a member of both organizations; Norway is a member only of NATO.

A 24-year-old American freelance writer today admitted after three days of questioning that an article he wrote for The New York Times Magazine about a trip with Khmer Rouge guerrillas to Cambodia was a fabrication. The writer, Christopher Jones, was found Friday night while in hiding in this Mediterranean resort town. This morning, he admitted that he had not visited Asia last year in preparation for the Dec. 20 Times article but had concocted it without even leaving Spain. Confronted by a Times editor and two correspondents investigating a charge that he had not visited Cambodia last year, Mr. Jones said that he had invented the tale, using his imagination and material he claimed to have gathered in two 1980 visits to western Cambodia. 'It Was a Gamble' An account of one of those visits was published with Mr. Jones's byline in the Oct. 20, 1980, Asian edition of Time magazine along with another article on Cambodia. Today, Mr. Jones said that he had lifted quotations and an entire paragraph from the Time dispatches, weaving them into the Times article, and that he had plagiarized a passage from Andre Malraux's ''The Royal Way,'' a novel set in Cambodia.

The Central Committee of Poland's Communist Party will meet this week for the first time since martial law was declared Dec. 13, the Polish press agency P.A.P. announced today. Although apparently intended as a demonstration that the party had not ceded its ''leading role'' in the country's affairs to the military, political sources said the session could witness a clash between moderates who came to the fore before martial law was imposed and a revitalized group of hard-liners. The Government, meanwhile, outlined guidelines for the future of Solidarity. A statement said the union should abandon political ''ambitions'' and strikes should be used only as the ''ultimate measure.''

The building endured for 57 years and emptied out in a month. When it was built in 1924, its five stories of ornamental brick and limestone rose solidly from the suburban splendor of the Bronx. Now it stands charred and vacant. The story of the final days of the apartment house at 2102-04 Aqueduct Avenue East is part of the chronicle of burning and abandonment, once confined to the South Bronx and now spreading northward. The Devastation Process When the first tenants moved into the apartment house, the South Bronx was a distant place whose boundary was four miles away. But several years before the last tenants moved out, the devastation had spread so far north that much of the borough beneath Fordham Road - including Aqueduct Avenue in the University Heights section - was regarded as the South Bronx.

Orders for new machine tools, long viewed as an important economic indicator, improved markedly last month, but were still far below the level of January 1981. The value of new orders last month totaled $290.75 million, down 27.8 percent from the comparable period a year earlier, the National Machine Tool Builders Association reported yesterday. In December, new orders were 49.2 percent below the level of December 1980.

International Polish Communist leaders will meet formally this week for the first time since martial law was imposed Dec. 13, the official news agency announced. The meeting is apparently intended to demonstrate that the party has not permanently ceded its ''leading role'' in the Goverment to the military rulers. Political sources said that it could bring about a clash between the moderates who predominated before martial law was declared and hard-liners. (Page A1, Column 3.) A writer admitted fabricating an article about a trip with Khmer Rouge guerrillas to Cambodia that appeared in The New York Times Magazine Dec. 20. The writer, Christopher Jones, a freelance, confessed when confronted by a Times editor and two Times correspondents. He said he had not visited Asia last year in preparation for the article and that he had concocted it without even leaving Spain, where he has been living. (A1:1-2.)

Marshall Field & Company, frightened by the biggest takeover threat it has yet faced, is scrambling to find a more acceptable merger partner than the Icahn group, which has already purchased a 19.4 percent interest, or to turn up a purchaser for the roughly 2.1 million shares owned by Icahn. The search, according to financial sources, even includes Carter Hawley Hale Stores, Los Angeles, which in 1977 found its own $42-ashare takeover offer spurned by Field's management. And another retailer, the May Department Stores Company, has expressed interest in a possible merger with Field in the last few days. Despite a lingering ill feeling against Carter, Field reportedly has been making inquiries through a third party. The third party appears to be Goldman, Sachs & Company, the investment bankers, hired by Marshall Field last week to help it find ''alternatives'' to the Icahn group.