Stock market investors have had a tough twelve months. Share prices have fallen hard and fast, since they peaked in March last year after what seemed to be an unstoppable climb. Recently the Canadian stock market experienced a meltdown in high tech stocks. Nortel Networks is a prime example of the meltdown. Nortel Networks Corporation (formally Northern Telecom Limited) is a leading supplier of fully digital telecommunications switching systems to telephone companies, cable television companies... In September 2000, Nortel was selling shares at a high price of around $125 per share . This was the beginning of the first fall of the stock. Then in mid February, Nortel took another fall when Nortel announced they were cutting 10,000 jobs. This caused the share price to fall by 33%. From this fall, the Toronto stock exchange went down 6% and other stocks markets across the world were affected. Nortel is the highest valued company in Canada. Whenever the stock price increa!
             ses or decreases, the change affects society as a whole. Many Canadians invested in Nortel and lost money from the decline in the price of Nortel. This caused people to cut back on personal expenses and the Canadian economy declines. We will be examining the cause and effect of the market meltdown.
             The cause of the current stock market crash has effect the value of many companies and individuals throughout the world. It all began when Alan Greenspan, chairman of the Federal Reserve in the United States, announced the increase in interest rates . This had a negative effect on major companies. Take for example Nortel Networks. Companies specializing in telecommunications will start to decrease the amount of digital telecommunications switching systems once the interest rate increase. Companies need money in order to purchase the equipment. If the interest rates increase, companies will decrease the amount of the money borrowed from the banks. ...