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The Talisman Hayes High School Delaware, OH
Issue Date: Monday, April 28, 2008 Issue: March/April 2008 Last Update: Monday, May 05, 2008
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At-a-glance

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One of the main concerns many voters are taking into consideration this fall is the candidate’s view on the economy. This would be a concern for U.S. voters knowing that the United State’s is already in debt $9,449,619,500,000 as of April 10, 2008. The United States debt is raising nearly $100.00 per second according to zfacts.com and this is not only frightening economists but the people of the United States as well.

Still, there will always be an interesting aspect to the economy that many do not take into consideration. One of the most important events in a professional investor’s life is the stock market and some of the drastic changes that take place on Wall Street each day. For investors who are already involved with the market, I am sure that they may have heard about the investing corporation known as Bear Stearns nearly going bankrupt. This event took place in the middle of March and has cost many investors millions of dollars. Simple math shows that this would be true when a stock has a 52-week high of $159.36 and all of a sudden crash to a weeping $2.84.

Do stockholders deserve to take such a hard hit? Or is this a risk that they should have taken into consideration when they put money into the corporation? A variety of investors have mixed feelings on this situation and finger pointing has already taken place. Some people believe that the James Cayne Chairman and CEO of Bear Stearns knew that the company was going to collapse and in turn sold a high portion of his shares he had held within the company.

Soon after the company went down on March 27, Cayne sold his remaining stocks in the company for $10.84 a share, which ended up valuing $61.3 million dollars. Knowing that the company was on the verge of bankruptcy, James Cayne turned to JPMorgan Chase & Co. for assistance. The two companies made an agreement with the government present, which offered ten dollars a share in the proposal for Bear Stearns.

With inflation on the rise, the Federal Reserve making cuts in the market, gas prices rising, and many companies nearly going bankrupt, there may be room to question on whether or not our nation is preparing itself for yet another recession. According to cnbc.com, the nation has lost 232,000 white-collar jobs within the past three months and this is just an example of yet another slip in the economy.

"It has been talked about for months, but now we have the final confirmation that the housing market depression and the seizing up of the credit markets have spread to the broader economy,” said Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi, in a note to his clients. “It is more certain than ever that the economy has entered a recession.”

With this being said and the trends that are being shown in the stock market Rupkey just may be true. The United States economy may currently be a threat and on the down swing.

If you would like to obtain further information on the economy, investing, news, or personal finance you can find it on cnbc.com.

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