Page 14 November 2008

NATIONAL

UPEI Cadre

Market rebound good for students: economist

Students are concerned about their job prospects in the face of American financial crisis

By Kenny Sharpe - The Muse

ST. JOHN’S (CUP) — Ear- ly week rebounds in global markets may signal the turn- around of the stock market, reassuring student aid and employment opportunities for graduates, says a Memo- rial University economist.

Markets around the world spent weeks on the decline, with stocks closing at new lows every day, struggling to hold onto their value.

During an eight day_trad- ing span from Oct. 1-10, the Dow Jones industrial aver- age — which gives an index of the stock market — lost al- most 2,400 points, or about $2.4-trillion dollars’ worth of shareholders’ money, mark- ing the worst losing streak in its 112 year history, with markets around the world showing similar losses.

On the flip, a $700-bil- lion injection made by the American government into the U.S. economy, followed by the addition of about a $3-trillion infusion into the European markets, the Dow, after a stunning loss, re- bounded with its largest gain in almost 75. years as markets closed on Monday, Oct. 13. Wade Locke, an economics professor at Memorial Uni- versity of Newfoundland in St. John’s, N.L., is optimis- tic that early-week rebounds may signal the beginning of

failing global economy. Jonathan Penney - The Muse

the end, and in turn, have fewer negative effects on prospering and graduating students.

“T’m hoping that the various government _ interventions around the world will cure the uncertainties and risks associated with borrowing money from financial insti- tutions,” Locke said.

“I am very optimistic that the worst of this is behind us.”

Locke summarizes’ what the variations in stock values over the recent weeks actu- ally mean.

“Tt just reflects people’s un- certainty of what will hap-

pen to their wealth in the fu- ture. For example, if you are about to retire, and you have your money tied up in mutual funds or whatever, and you thought you had $200,000, now suddenly they have a lot less.”

“(The Canadian] dollar is affected, so that affects peo- ple like you or I directly,” he added.

Locke says if Monday’s gain of over 900 points hadn’t caused an early week turnaround, students may have felt the crunch.

“T think we might be OK. We might get out of this yet. The issue is with uncertain-

Wade Locke, Memorial economics professor, hopes government intervention in markets will turn the tides of a

ty, with uncertainty there is more risk, with more risk there is more difficulty for borrowers to borrow.”

“Tt would have been very difficult when it comes to borrowing funds or the abil- ity to borrow student loans

. . and probably would be students finding it more dif- ficult to take out a student line of credit,” said Locke.

“In sectors that would have been affected by the market crisis, it would have been more difficult for students to find jobs, and in turn, pay their student loans or line of credit off.”

_ Amanda Butt, a recent Me-

morial education graduate, says that while the ongoing market rebounds may indi- cate short-term gains, she worries for her future and her security.

“Most of our country’s trad- ing is with the United States. As a country, we will be greatly affected should the U.S. be unable to pull them- selves out of whatever it is they started,” said Butt.

“I fear not being able to find employment in the near future. I mean, will there be funding available to pay for new programs for new fa- cilities to employ more peo- ple?”