What was going on when I was born?

President Reagan was warned by home builders and bankers today that ''time is running out'' for dealing with the high Federal deficit and preventing a downturn of the business recovery. The President, while promising to work on the problem, said there was no direct tie between the large deficit and high interest rates. He said the larger problem was a baseless ''pessimism'' that the economic recovery might falter. 'A Pessimism Out There' Proof of this, he told a panel of builders and bankers who questioned him here, was the fact that while the prime interest rate fell in his Administration from 21.5 percent to 11 percent, ''our deficit was doubling.''

City school officials have made no significant progress in preventing students from dropping out of school, according to a Board of Education draft report for the last school year. The study found that 11.9 percent of the students in the city's high schools left the system in the 1982-83 school year. Projecting that over four years, the study estimated that 40 to 43 percent of that year's ninth graders would not be in school in the spring of 1986, when they would have been seniors. The figure for the year before was 45 percent, a difference the report calls ''not significant.'' The board's figures have remained fairly constant over the last six years.

THERE can be little doubt now about Malcolm Morley's importance. As much as any painter of his generation, he has been following the path of the most resistance. During the last few years, his canvases have been rings in which he, Abstract Expressionism, Pop Art, Conceptual Art and assorted modernist heavyweights have been hammering away at one another. Morley has helped preserve the urgency of one of the Abstract Expressionist questions: How is it possible for an artist to enlist in the just wars of 20th-century art and still produce painting of conviction and ambition? One of the problems with Morley's past work was that the conflicting forces in it could hammer away at one another to the point where paintings seemed slightly punchdrunk. A work that might at first seem wild, effusive and instinctive could wind up too stunned by the blow of Conceptual Art to be able to find its own corner. A painting that seemed an expression of Morley's robust sensuality could wind up almost bleak in its self-denial and abnegation. While Morley's method became increasingly influential, some work that resulted from that method seemed not so much generative as self-destructive and perverse.

ELEANOR BLAU EGGS will roll, fly and be in the way tomorrow and Sunday at the Bronx Zoo, which is serving up its fourth Great Egg Event. Children and grownups are invited to the festival, which has identical programs both days from 11 A.M. to 3:45 P.M. New this year will be morris dancers and a mime and dance group that calls itself Pandemonium and the Dragon Fly. As before, the climax each day will be a pageant with a giant chrysalis and a parade that everybody can join.

AS the most dramatic period of the Christian church year, the eight days from Palm Sunday through Easter, commemorate an astonishing sequence of events. The quick succession of moods - the hopefulness of Palm Sunday, the tragedy and despair of the Crucifixion on Good Friday and the triumph and wonder of the Resurrection on Easter - these have been reflected in some of the most inspired music in history. It is music that can be found this weekend and all next week in New York churches and concert halls. One of the most ambitious presentations can be heard tomorrow night at 8 as a prelude to Holy Week. This is a performance of Parts II and III of Handel's ''Messiah'' at the Greek Orthodox Archdiocesan Cathedral of the Holy Trinity, 319 East 74th Street. Dino Anagnost, the conductor of the Metropolitan Singers-Greek Choral Society and the Little Orchestra Society, will lead his ensembles and soloists in this most popular of oratorios. Although it is traditionally given at Christmastide, ''Messiah'' devotes the last two of its three sections to the themes of Holy Week. As Mr. Anagnost says, ''It is more appropriate to this season than to Christmas.''

Jesse Jackson disputed a Black Muslim leader's description of Hitler as ''a great German'' but refused to sever political ties. Page 10. The Rev. Jesse Jackson's candidacy for the Democratic Presidential nomination appears to be reshaping the contours of American politics. Political analysts say that even though the black minister has scant chance of winning the nomination, his candidacy has shown enough strength to influence politics beyond this year's campaign. The respect Mr. Jackson has gained has made the idea of a serious black Presidential candidacy much more acceptable, these analysts say. Moreover, they say that by raising blacks' political consciousness and participation at the polls, Mr. Jackson has crystallized their power into a potent force in national politics.

A report in the Business People column on Wednesday about the president of Bloomingdale's, James M. Guinan, incorrectly reported the line of management authority. Both Mr. Guinan and Marvin S. Traub, chairman and chief executive of Bloomingdale's, will report to Howard Goldfeder, chairman and chief executive of the parent company, Federated Department Stores Inc.

FRIDAY, APRIL 13, 1984 Markets Stock prices surged. The Dow Jones industrials rose 26.17 , to 1,157.14, the strongest gain in more than six weeks. Volume rose to 96.3 million shares. Analysts said investors were encouraged by a run of strong earnings results and higher bond prices. (Page D1.) M-1 fell $5 billion, twice the drop expected. But the money supply data had little effect on the credit markets; prices remained strong and interest rates fell a bit. (D14.) The Municipal Assistance Corporation is to sell about $225 million of bonds. (D15.) Money market mutual funds increased their assets by $647 million. (D6.)

Tricia Juhn's last date before Eric Gordon sounded great on paper. ''He was this older guy, a junior at N.Y.U.,'' said Tricia, a high school senior. ''Culture coming out of his ears, independently wealthy. We went to D.D.L. for lunch - Dino De Laurentiis - to Shakespeare in the Park and the Met.'' It was, Tricia said, a snore. The idea of asking out this sort of girl made Eric Gordon a nervous jangle. He was only a high school senior himself - smart, but not popular, out of step, he felt, with his age. While his classmates moonwalked to Michael Jackson's music, he liked ''old stuff, from the 1970's, like Emerson, Lake and Palmer.''

ABOARD M.S. NOORDAM, off Le Havre, France, April 9 - When Nico van der Vorm, chairman of the Holland America Line, is asked why he has just built this $150 million luxury cruise ship for the United States market, he replies with a quotation from the 16th-century Dutch scholar Erasmus: ''The highest form of bliss is living with a certain degree of folly.'' Although the American appetite for vacation cruising has exploded during the last decade, Mr. van der Vorm speaks of ''folly'' because the Noordam has been completed just as signs of overcapacity are emerging. This year three other new cruise ships, all aimed at the United States market, are due to be launched, with three more in 1985. As a result, cruise-ship operators are starting to wonder if the industry has been moving too far, too fast.

Friday SEGOVIA FINALISTS Four finalists in a worldwide competition in classical guitar will vie for the first Andres Segovia Fellowship tonight at 8 in Grace Church, Broadway and 10th Street, and the public is invited, free. Three guitarists - Mr. Segovia, his wife, Emilita Segovia, and Eliot Fisk - and the pianist Alicia de Larrocha will judge the performances and name the winner. The award, by New York University's Faculty of Arts and Sciences, includes an $8,000 stipend and tuition for studies at N.Y.U. CHILDREN PLEASE TOUCH Children are encouraged to touch things and to create, for instance, stamps with their names on them, at a new show at the Manhattan Laboratory Museum, 314 West 54th Street. The exhibition, on through Aug. 31, explores ways in which humans have created signs of their existence, from cave drawings to modern graffiti. Included are medieval banners, Chinese stamps, alphabets and photographs. Children: $3, adults, $2 on weekends ($1 less for each weekdays). Open 1 to 5 P.M., Wednesdays through Fridays, also Sundays; 11 to 5 Saturdays. Information: 765-5904. MANDRAKE' IN SOHO

The International Business Machines Corporation reported yesterday that its net income rose 23 percent in the first quarter, to a record $1.2 billion, or $1.97 a share, from $976 million, or $1.62 a share, in the first quarter of 1982. The gain was stronger that most analysts had expected. I.B.M. officials said orders continued strong in all segments of the company's business, from its top-of-the- line mainframe computers to its expanding line of personal and office computers.