Critique of Federal Reserve Podcast

I choose to review Ashley and Justins federal reserve podcast. I found thier podcast to be very entertaining. Instead of the traditional aproach of just spewing out facts - the approach I myself took, they decided to do a question and answer format, like a student asking her peer for advice. For the most part we had the same information, so unless we were all lied to, their information was factual. They also had many colorful pictures to match thier voices. Some of the pictures were slightly humours when paired with their voices. Overall, I found thier podcast to be very original.

Compound Interest and the Rule of 72

Compound interest is interest that is calculated not only based on the initial, or principal investment, but also upon the accumulated investment. This is in contrast of regular, or simple interest, which is only based on the initial investment.
The equaltion to calculate compound interest is as follows:

Where:
P = future value
C = initial deposit
r = interest rate (expressed as a fraction: eg. 0.06 for 6%)
n = # of times per year interest in compounded
t = number of years invested

P = C(1+ r/n)nt

I remeber doing someething simular if not the same in SAT Prep class a year or so ago. However, we never talked about the rule of 72. The rule of 72 estimates the amount of time it would take to double an investment.

Insider Trading Scandal - What Happened?

http://www.themoneytimes.com/articles/20070302/biggest_insider_trading_scandal_in_two_decades_exposed-id-103008.html

On March 1, 2007, a huge insider trading scandal was uncovered. Insider trading is the illegal practice in which persons who are close to a company makes stock trades based on information not released to the public. The estimated total of illegal income due to illegal trading was an estimated $15. According to SEC regulators, this was the largest insider trading scheme in 20 years. Thirteen people traded based on the inside information, including lawyers and influential stock brokers over the course of 5 years.

The accused to advantage of insiders at both organ Stanley and Co. and UBS Securities LLC. to acquire inside information about about stock fluctuations and company acquisitions. However, if this case ends up anything like Martha Stewart's case, they will be sentenced to a couple years in camp, with basic cable and tennis courts. Federal prison is nicer than a lot of people's homes.

Federal Reserve Podcast Text

This is the information I used in my Federal Reserve Podcast:

The Federal Reserve, also known as the "The Fed" is the central bank of the United States. Its headcouters are in Washinton, DC. The federal reserve serves several roles. It primarly role is to serve as the bank for the federal government aswell as the bank for other banks. The federal regulates interest rates of all the other banks in the country. It is responsble It also regulates the amount of "practional reserve," the portion of its deposits that a bank must maintain to satisfy any demands for withdrawl.

The federal reserve system was created on December 23th, 1913, under Woodrow Wilson's administration as part of the Federal Reserve Act. The federal reserve system includes twelve regeional banks in adition to other member banks, which are all overseen by the Board of Governors. The Board of Governors consists of seven members, who are selected by the president and confirmed by the Senate. The BOG is lead by the chairman and vice chairman. The current chairman is Ben Bernanke, who was aapoted in on Feburary 1, 2006. He was preceeded by Alan Greenspan, who held the office since 1987.

All national banks are required to become members of the federal system. Each member bank is required to

Dow Down 416 points. Why?

On Tuesdaym February 27, the Dow Jones Industrial Average went down 416 points, or 3.29 percent, the biggest drop since Septermber 11, 2001. Invesors lost an estimated $613 billion on that day. The Dow actually feel to as low as 500 points but recovered to 416. Analysis speclate that the drop was a reaction to the huge market correction in the Chinese stock market. However, many believe that the drop was due to a computer glitch. A glitch prevented kept some trades from being immediately reflected in the index. Dow Jones & Co. blamed the problem on the record volume at the NYSE, and switched to a backup computer.

Despite its immediate servrity, the drop was not significant enough to make the top 20 list of drops since 1950. This drop is nothing in comparison to the stock market crash of 1987. On Black Monday, the Dow Jones lost 22.6% of its value, and in 2002, the market lost 4% of its value on two occations.

I think this is a good opertunity to buy, however that is still a risky move since no one knows if stock values will continue to decrease and when they will stabilize. As I stated earlier, I plan on waiting out the storm until stock values begin to climb again. Since many companies have begin to climb again, I have decided to invest in a few that will likely continue to increase in the long term.

Stock Market Game - 1 - Initial Investment Strategy

In my economics class, we are playing the StockQuest stock market game. I started playing the day before the big 9% drop in the market - I got lucky. As part of my investment strategy, I've decided to wait out the storm. I could have bought stocks while they were going down in c0st, but it seems like a better idea to wait until stocks begin to clim again, then jump on while they are still relatively low.

My long term investment plan is to invest in companies that release hot new products. For example, Apple is soon to release the next version of OS X, Leopard, which is almost guarantee to increase the value of my stocks. I also plan to invest in stable stocks, like cerial and toilet tissue, that will always be in demand.