In the past week, while eyes were on the meltdown of New York Gov. Elliot Spitzer, another meltdown was in progress that can damage Connecticut’s state budget and the stability of financial markets.

On March 10, Spitzer publicly acknowledged wrongdoing. Less noticed that same day, shares of Bear Stearns, a financial institution with major exposure to sub-prime mortgages, began a week long decline in share price.

By this weekend, the Federal Reserve brokered a bailout at a shocking $2 a share to preserve the stability of markets. In two days alone, $4.5 billion in equity had vaporized.

Because of the effect on the stock market, the short-term implications for Connecticut’s budget will likely be losses in our pension fund investments.

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