Financial crisis has students' futures in question
by Adam Jobe, posted Dec. 1, 2008
With recession in fear, the Dow Jones Industrial Average lost more than 20 percent in the first seven days of trade in October. On what was called, “Manic Monday,” Oct. 13, 2008, the Dow gained 936.42 points; this was the largest daily gain in history. With another gain towards history, on Nov. 5 and 6, the Dow, had its largest two-day loss. The Dow Jones Industrial Average, according to Marketvalue.com, is the average of 30 of the largest, most widely traded companies. Some of these companies include AT&T, General Motors Co. and Kraft Foods. The Dow drops when these companies begin to lose profits, dropping their stocks.
According to CNN Money, on Nov. 18, stocks had slumped in the afternoon after government official’s reassured investors that the $700 billion bailout plan was working. This did not calm investors’ worried about the automobile industries and the economy. The Dow lost 1.8 percent because of these factors on Tuesday.
The financial crisis started within real estate, many people were buying houses and taking advantage of the real estate markets that typically don’t change. Once house prices started to fall, people had a difficult time making payments, which left the mortgages back to the banks.
The crisis is already affecting clothing and commodities such as soybeans and corn. Soybeans have taken a major fall, and corn prices have dropped from $5 a bushel to around $3.50 a bushel. The ethanol mandate is helping to keep corn prices up. On the farming side, livestock will take the biggest drop, because of feed and livestock prices, according to Jan Dauve, MU professor of agricultural economics.
“I don’t think it will change the size of class, but will change how you pay for it and who all goes,” Dauve said, discussing the financial crisis effecting next year’s students.
Unemployment will also rise in jobs that are not as needed as much. Jobs such as restaurant servers and retail store employees will take a toll. Stores will be cutting back on extra employees. Switching jobs or finding new jobs will be difficult, Dauve said.
“Seniors graduating in May or next year will think about graduate school and wait this crisis out,” Dauve said. “Bad financial times tend to increase enrollments, particularly for graduate programs.”
