What was going on when I was born?

Vatican aid for Nazi war criminals after World War II has been alleged in statements by a French Nazi- hunter and a declassified State Department report. According to the Frenchman, Serge Klarsfeld, Walter Rauff, a former SS colonel wanted for the mass gassing of Jews in death vans, told in 1962 of having been given refuge in Vatican City convents for 18 months. Chile, which has harbored the Nazi for more than 25 years, is facing mounting demands for his expulsion. (Page A1, Column 1.) Italy's concordat with the Vatican has been tentatively revised after 15 years of negotiations. Under the plan, Roman Catholicism would cease to be the state religion. (A15:1.)

A late selloff tied to rumors that President Reagan would not run for re-election sent stock prices down sharply yesterday in heavier trading. The Dow Jones industrial average closed off 10.99 points, to 1,231.89. At 11:30 A.M, the average was up more than 7 points, its high for the session. But in the final hour of trading, when the Dow was up slightly, the rumors began spreading, sending equity prices tumbling.

The Economy President Reagan called for bipartisan cooperation to reduce the Federal deficit by $100 billion in the next three years. His aides said the appeal, delivered in the State of the Union message, involved ''relatively less controversial'' spending cuts and tax increases. The President also said he would ask the Treasury to propose by December a streamlining of ''the entire tax code.'' (Page A1.) Democratic Congressional leaders responded warily, saying they first wanted assurances that the White House was willing to cut military spending. (A1.) Orders for durable goods fell 1.1 percent in December from November but showed a strong 16.9 percent rise for all of 1983. Most of December's decline reflected a drop in traditionally volatile military orders. Last year's gain was the biggest since 1978. (D1.)

Victor Posner, a Miami-based financier whose holdings in more than 40 companies are estimated to be worth more than $1 billion, appeared yesterday to be well on the way to winning control of the Royal Crown Companies. Mr. Posner, who already owns 28 percent of the big bottling and fast- foods concern, was told by a four- member committee of independent Royal Crown directors that the company would accept his $40-a-share offer by Feb. 10 unless it got a better one in the interim. Mr. Posner has proposed a leveraged buyout of the 5.9 million Royal Crown shares that he does not own.

President Reagan, declaring that bipartisan cooperation in Congress had already helped arrest the nation's ''long decline,'' appealed to Republicans and Democrats tonight to join in a new attempt to reduce the projected Federal deficit by $100 billion in the next three years. In his annual State of the Union Message, Mr. Reagan mixed his renewed appeal for bipartisan cooperation on Transcript of message, page B8. taxes and spending with a nearly evangelical evocation of the progress and renewed hope he said the United States had achieved since he took office. ''There is renewed energy and optimism throughout the land,'' Mr. Reagan declared. ''America is back - standing tall, looking to the 80's with courage, confidence and hope.'' 'We Will Finish Our Job' In a sweeping summation that sounded almost like an appeal for another term in office, Mr. Reagan said: ''After all our struggles to restore America, to revive confidence in our country and hope for our future; after all our hard-won victories earned through the patience and courage of every citizen - we cannot, must not and will not turn back. We will finish our job.''

A picture caption on the Washington Talk page yesterday with an article about three women who work at the White House reversed two of their identifications. Nancy Risque was at the right and Becky Norton Dunlop at the left.

The idea started to pop up in conversations among members of the Chicago Board of Trade in 1976. Why not start a municipal bond futures contract? Then someone would clear his throat and mention the catch: There were about 1.5 million different municipal bonds floating around and about 80,000 issuers. It was not like corn. And then everyone would go back to what they were doing. So began, in fits and starts, what one Board of Trade official likes to call the ''hunt for the Rosetta stone.''

The Reagan Administration proposed ''a blueprint for desegregation in the future'' today as it concluded an agreement to desegregate public schools in Bakersfield, Calif., without mandatory busing. The Government filed suit today in Federal District Court alleging illegal discrimination by the city school authorities. At the same time, the Justice Department and the Bakersfield City School District proposed a consent decree to avoid trying the case. A Federal judge later approved the agreement.

Merchants fear it. Consumers like it. It is a vast supermarket at Cherry Street and Pike Slip, and it became a source of debate three years ago, when its construction was approved for the Two Bridges urban renewal area on the Lower East Side. A week and a half after its opening, the debate continues.

IN his ''The Complete Guide to Factory-Made Houses,'' Arthur M. Watkins tells the anecdote of how a well-to-do Ohio homeowner, sitting in the comfortable living room of the two-year-old home he had recently bought, complained to a friend about a new tract of prefabricated houses planned nearby: It would ruin the neighborhood. The friend gently informed the homeowner that, well, they were in fact talking in a prefabricated house, though an expensive one, and that their immediate ''endangered'' neighborhood was actually a housing development made up entirely of such houses. The prevailing impression about factory-built houses is that they come down a highway, in two halves, on the bed of a truck, and that if they are inexpensive, it is because they are cheaply built. Some cities, like Chicago, ban them. In New York, Barry G. Cox, assistant commissioner of public affairs for the City Buildings Department, said, ''New York City was apprehensive as to the standards of manufactured houses, but now they are treated as any other single-family house.'' A group of 90 such houses are being built in the South Bronx. The prevailing impression, however, does not take into account the wide diversity of prefabricated houses, including the substantial homes at the high end of the market. Prices range from $15,000 for the least expensive mobile home to about $250,000 for some completed custom-manufactured houses. Besides mobile homes and the trailer-type modular houses, there are houses built with panelized components, as they are known, and houses built from precut materials.

The international role of the American banking system is changing as United States banks have become net borrowers from the rest of the world instead of net lenders, the Bank for International Settlements said today. During the second and third quarters of last year, the institution said in its latest report on international banking developments, American banks borrowed $14.6 billion more overseas than they lent, reversing a 10-year trend during which the United States has generally been a net supplier of funds to world credit markets. The B.I.S., which is based in Basel, Switzerland, and is sometimes known as the central bankers' central bank, oversees the international banking system on behalf of its principal shareholders, the major Western central banks. It reports every quarter on international banking developments.

Allegations of Vatican involvement in the escape of Nazi war criminals after World War II have emerged in statements by a French Nazi-hunter and a declassified State Department report. According to Serge Klarsfeld, a Paris lawyer who has specialized in tracking down fugitive Nazis, Walter Rauff, a former SS colonel wanted for the mass gassing of Jews in mobile death vans, told in 1962 of having been given refuge in Vatican City convents for 18 months after the war. Chile, which has harbored the 77- year-old Mr. Rauff for more than 25 years, is now facing growing demands for his expulsion. Yesterday Israel made a formal request to Chile for Mr. Rauff's extradition. And Simon Wiesenthal, the Vienna-based Nazi-hunter, and a Los Angeles institute affiliated with him said the State Department had recently taken an interest in the case. Historian Obtains Report The formerly top secret State Department report, dated 1947 and never officially made public, called the Vatican ''the largest single organization involved in the illegal movement of emigrants,'' including Nazis. The report was obtained by a historian of the Holocaust, Charles R. Allen Jr. of Manhattan, who made it available to The New York Times.