This Week in Finance: October 20-26

By Broadside News Editor Noah Martin

College Cuts
Institutions of higher education will be cutting their budgets in response to Gov. Kaine’s $2.5 billion slash in the state budget. Old Dominion University, Norfolk State and Tidewater Community college are all shutting down facilities, laying off employees and forming auditing committees to cut more than $10.1 million from their budgets. The Governor’s plan calls for a five to seven percent reduction in funding for public institutions of higher learning.

Oil
Light sweet crude oil has reached $64 a barrel. The effects are showing up at the gas pump, but maybe not for long. Organization for Petroleum Exporting Countries held an emergency meeting on Oct. 24 to discuss production reductions in the face of falling oil prices. OPEC decided to reduce oil production by 1.5 million barrels a day. They will meet again in December and are scheduling to make further cuts if crude oil prices continue to fall. Analysts expect oil consumption to fall worldwide for the first time since 1983 due to a decrease in demand amidst the world financial crisis.

Greenspan in the Wrong
Former chairman of the Federal Reserve, Alan Greenspan, admitted the necessity of regulation in derivative markets to a congressional committee on Thursday, Oct. 23. Congressional representatives questioned Greenspan on his fundamental beliefs in an unregulated market. Greenspan said that the current crisis has caused him to reassess his understanding of basic market principles.

Market
A large sell-off in overseas markets, an across the board decrease in stock measures, caused the Dow to plummet over 300 points by the close of Friday. Analysts were more disappointed that there was not a greater panic than recorded, claiming that a bottoming out would stimulate bargain hunters to move in and turn the market around.

Information compiled from thewashingtonpost.com, The New York Times, The Virginia Pilot and other wire services.