TSX finished flat- Chapter 6

http://www.vancouversun.com/business/asia-pacific/Monday+Trading+sinks+finish+flat+after+Greek+debt+downgrade/3153914/story.html

Summary
Due to the Greece’s recent decline in economic status, Toronto Stock Exchange (TSX) finishes flat for the session ended. North American markets have been rising by triple digits in morning trades, with S&P/TSX Composite index up 114 points at 9am. However, following Moody’s comments about the Greek economy, the S&P/TSX Composite index ended the day with only a net gain of 0.42 of a point. The S&P/TSX Venture Composite index fell 7.63 points.

Connection
We are seeing a global trend of odd changes in currency values and the stock market due to the huge debt Greece has got into, and to those who have physical cash in their hands or pockets right now, you are in big trouble. As currency rates change, so does the face value of your money. In chapter 6, we were introduced to the risk of having cash on hand, and the best thing to do with it is to invest it in short-term, marketable securities such as bonds and stocks so that the face value of your money will not decline as you have bought into a certain security with a certain currency and a specific time. The only thing that can then change the value of your money is the value of the stock, and not the face value of the currency.

Reflection
It really sucks to have the world once again suffer from an economic slump. The rest of the world is slowly recovering in their status, and Greece pulls out a huge debt right out of their pocket and is on the brink of declaring bankruptcy, and the last thing anyone wants is the stock market to crash again. Many Economists believed that here in Vancouver, it is becoming a W-shaped economy. What that means is the economy suffers a slump, makes a slight attempt to get back on track, and then crashes again before it fully recovers. They believed that the Vancouver 2010 Winter Olympics created a fake hope in the economy, and now with the slump in Greece, many truly believe that we are due for another downfall…

Clement Ip