The stock market is down, stores are closing their doors, funding for state programs like SUNY is disappearing and students are being left to wonder what this economic recession means for their futures.

According to Binghamton University economics professor Christopher Hanes, there were two main reasons for the current financial crisis.

The first was the breakdown in the financial markets, which made it harder for people and companies to borrow. The second was that people’s consumption spending fell dramatically, even for products and services for which they didn’t need to borrow.

This happened before more people began to get laid off.

Martin Murray, an economics professor at BU, further explained how the crisis developed over a long period of time.

“It was primarily grounded in the deregulation of financial markets and the carte blanche approach to new financial instruments like mortgage-backed securities, which started with J.P. Morgan in the late 1990s,” Murray said. “In the past, to make money, financial brokers sold everything they could, including mortgage-backed securities that were organized into tranches, or sectors, that were rated.”

According to a New York Times article published in September 2008, financial companies needed firms like Fannie Mae and Freddie Mac to continue buying mortgages. Rising delinquencies and falling home prices, the article said, were hurting their ability to make and hold loans.

“The credit problem, the liquidity problem, the economic problems are not going to get better any time soon without resolving the housing problems,” Robert Gahagan, head of the taxable bond investments at American Century Investments, told The New York Times.

Another New York Times article published in October 2008 said that, after adjusting for inflation, stocks in October were more than 40 percent lower than they had been during their 2007 high, and more than 50 percent lower than the 2000 high.

Hanes said this recession has similar qualities to previous recessions.

“Every recession begins with a decrease in consumption spending and people’s fears of a recession,” Hanes said.

The reason this recession is different, he said, is the financial crisis, which last occurred in 1930.

“Everyone expects that this will be the worst recession since the Great Depression, but not as bad as the Great Depression,” Hanes added.

According to a New York Times article written Feb. 5, 2009, the government reported a rise in unemployment claims to 626,000 — the highest it’s been in 25 years.

“The market’s in a twilight zone right now,” Ed Yardeni, president of Yardeni Research, told The New York Times.

However, the recent transition in government administration has instilled a sense of hope in Americans — hope for a step in the right direction.

Hanes agreed.

“Most economists think that the recession will be worse if the spending package doesn’t go through,” he said.

Hanes said that the federal government is doing exactly what it should be doing. Pay raises and price inflation will continue to decrease, Hanes said, but that is common during a recession.

According to Hanes, Binghamton University students need to remind themselves that this recession is different from others because it started in the financial market and hit them the hardest.

This causes a huge dilemma for BU students because, according to Hanes, most of the University’s best graduates have gone into the financial market, which means all of our alumni connections are useless now.

Firms that hired BU graduates will either not be hiring for a long time or no longer exist.

“The lesson is that people have to think differently and look for jobs outside of NYC,” Hanes said. “Don’t think you’re going to get a job that your fraternity brother of three years got; that’s going to be over for a very long time.”

His final piece of advice to BU students was to “lower your expectations, and whatever happens to you, it’s probably not your fault.”