1. MISERICORDIA UNIVERSITY
Campus
Economist
Volume 1, Issue 1
Sidebar Heading
• Federal Reserves Role in Today’s Economy
• Can the Obama Administration fix this crisis?
• Outrageous has high expectations for the future!
Date: 4/12/12

2. Page 2

3. Page 3
Inside this Issue
Who will you vote for?
Pg.10
Pg. 4
Editors Note
Financial
Crisis
Movie review
Pg. 11
Pg. 5
Inflation/
Hope on the
Horizon
Economic
Deflation Conditions
Pg. 12
Pg. 6
Federal
Price Check
Consumer
Goods
Reserve
Pg. 13
Pg. 8
Interview
Meet the
Editors
Paul Nardone

4. Page 4
Editor’s Note
Write the Editor: mcdaniet@misericordia.edu
Movie Review
Wall Street: Money Never Sleeps
G
ordon Gekko is back, but he is not as power-
ful of a force as he once was. Wall Street:
Money Never Sleeps is a sequel of Oliver
Stone’s 1987 film, Wall Street. This movie uses the
same material as the original, but take’s place
amongst today’s economic conditions. It is not an
extension of the storyline, but still possesses the
main character, Gordon Gekko, and the theme of
money in American culture. This movie would have
been more pleasurable if it did not mirror the origi-
nal and have Gekko perform the same villain acts.
Overall, this movie has a good plot about traders on
Wall Street struggling during the global banking
crisis.
Shia Labeouf plays the character, Jacob Moore, a
young trader whose mentor dies and seeks revenge
on the company that brought them down. Bretton
James is a partner of this company called Churchill Schwartz. In the movie he manipulates the market and is consid-
ered a moral hazard. Jacob Moore discovers that greed is still the name of the game so he forms an alliance with
Gordon Gekko, a former hotshot of Wall Street who just served 8 years in jail for insider trading. Moore’s fiancée,
Winnie, ironically is Gekko’s daughter, who refuses to speak to him. Therefore, Moore is taking a risk by going be-
hind her back. He ends up learning why Winnie betrays her father when he portrays his true colors. Gekko is in-
sane or in other words he does something repeatedly and expects different results each time. He does pull through
at the end and makes up for his mishaps.
If you want to know exactly what Wall Street is like then I recommend you watch this movie. I think that it correctly
illustrates the atmosphere found in this type of environment. Such as the chaos, stress, and behind the scene acts.
Better yet, it shows Jacob Moore as a “young” trad-
Box Office for Weekend of April 6-8, 2012 er which is becoming more prevalent in today’s
economy. The movie emphasizes on the concept
Top Title Weekend Total Gross Weeks moral hazard. In the movie this is when someone
5 Gross in Thea- takes your money and is not responsible for it.
ter Moral hazard is a problem of asymmetric infor-
mation which occurs when one party knows more
about an economic transaction or asset than the
1 The Hunger Games $33,111,557 $302,450,722 3
other. Although you may have disliked the original
Wall Street movie, I suggest you give this more
modern version a shot and discover the true colors
2 American Reunion $21,514,080 $21,514,080 1 of Gordon Gekko.
3 Titanic 3D $17,285,453 $25,645,935 1
4 Wrath of the Titans $14,732,121 $58,614,212 2
Tyann McDaniel
5 Mirror Mirror $11,095,140 $36,574,022 2 Managing and Art Editor

5. Page 5
Is the Economy
turning around?
By: Adam Grzech
I
nflation is describe by in- sumer price index. Gasoline has since July 2010 (CPI). It is only a
vestor words as the overall risen a huge 6 percent in the last matter of time though through the
general upward price few weeks causing the consumer rising prices of transportation will
movement of goods and price index to rise to .4 percent. eventually drive the price of gro-
services in an economy ceries up. In turn this will
(often caused by a in- drive up inflation.
crease in the supply of Future Inflation predic-
money), Usually as tions look like they will be
measured by the Con- in an upswing. The two
sumer Price Index and items people purchase
the Producer Price In- most are food and gaso-
dex. Deflation is de- line. Gasoline unfortunate-
scribed as a decline in ly has ties to every busi-
general price levels, ness due to its necessary
often caused by a reduc- use in the transportation
tion in the supply of industry. The rise in the
money or credit. Cur- price of transportation in-
rently the United States directly causes food prices
is in a stage on inflation to rise. When food prices
as described in this ta- do rise, inflation is a guar-
ble from U.S. Inflation. antee. Better predictions
According to the Con- can be made when the in-
sumer Price index and flation rate is calculated
the Bureau of Labor Statistics The saving grace for the CPI is for March by The Untied States
Blame, the large inflation from that groceries prices have rela- Government.
January and February is mostly tively stayed flat. This flat line for
due to the rising value of the con- grocery prices was the first time
Table of Inflation Rates by Month and Year (1999-2012)
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ave
2012 2.9 2.9
2011 1.6 2.1 2.7 3.2 3.6 3.6 3.6 3.8 3.9 3.5 3.4 3.0 3.2
2010 2.6 2.1 2.3 2.2 2.0 1.1 1.2 1.1 1.1 1.2 1.1 1.5 1.6
2009 0 0.2 -0.4 -0.7 -1.3 -1.4 -2.1 -1.5 -1.3 -0.2 1.8 2.7 -0.4
2008 4.3 4 4 3.9 4.2 5.0 5.6 5.4 4.9 3.7 1.1 0.1 3.8
2007 2.1 2.4 2.8 2.6 2.7 2.7 2.4 2 2.8 3.5 4.3 4.1 2.8
2006 4 3.6 3.4 3.5 4.2 4.3 4.1 3.8 2.1 1.3 2 2.5 3.2
2005 3 3 3.1 3.5 2.8 2.5 3.2 3.6 4.7 4.3 3.5 3.4 3.4
2004 1.9 1.7 1.7 2.3 3.1 3.3 3 2.7 2.5 3.2 3.5 3.3 2.7
2003 2.6 3 3 2.2 2.1 2.1 2.1 2.2 2.3 2 1.8 1.9 2.3
2002 1.1 1.1 1.5 1.6 1.2 1.1 1.5 1.8 1.5 2 2.2 2.4 1.6
2001 3.7 3.5 2.9 3.3 3.6 3.2 2.7 2.7 2.6 2.1 1.9 1.6 2.8
2000 2.7 3.2 3.8 3.1 3.2 3.7 3.7 3.4 3.5 3.4 3.4 3.4 3.4
1999 1.7 1.6 1.7 2.3 2.1 2 2.1 2.3 2.6 2.6 2.6 2.7 2.2

6. Page 6
Fe d e r a l R e s e r v e
By: Jordan Wollenberg
What is it’s role? America’s Rich-
98 est Men of 2011
of money floating around, the Fed-
eral Reserve would begin to sell
years ago on Decem- government bonds to try and take
ber 13, of 1913, The Federal Re- some money out of circulation.
Bill
1
serve was created when the Feder- Where as if the money supply was
al Reserve Act went into effect. low, the Federal Reserve would Gates
The Federal Reserve was created buy back those bonds with the
largely due to the panic caused by intention of adding to the current 55 years old
a recession in 1907. It caused runs money supply. This has been oc- $56 billion
on many banks and even led to curring often in our country. Microsoft
some local banks going into bank- While I hopefully made that all
ruptcy. When created, Congress seem very easy to figure out, we all
established the three main objec- know nothing in life is that easy
tives for the Federal Reserve: max-
and cut and dry. The idea that
imum employment, stable prices, Warren
2
and moderate long-term interest whenever the economy goes
rates. However, the current func- through a rough patch the Federal Buffett
tions of the Federal Reserve have Reserve will just begin to buy up 80 years old
expanded over the years to in- government bonds until the econo- $50 billion
clude many more functions. my bounces back is not quite that
One of the main goals of the Feder- Berkshire -
simple. By buying back large
al Reserve today is to promote eco-
amounts of government bonds, the
Hathaway
nomic growth while making sure
inflation does not run rampant. Federal Reserve has added a large
There are different ways that the supply of money back into the
Larry
3
Federal Reserve can go about do- economy. Sounds great does it
ing this, with the three most com- not? To answer that in theory, yes it Ellison
mon being the discount rate, open does, but in reality not exactly. By 66 years old
market operations, and reserve
requirements. Because of the most
throwing large sums of money $39.5 billion
back into the economy you begin
recent recession the Federal Re- Oracle
serve has begun to use open mar- to flirt with inflation. If there is in-
ket operations more and more. flation the Federal Reserve would
Therefore, I believe that it is best have to resort to selling back all of
that I focus my discussion on open those government bonds it had just
Sheldon
4
market operations, what they are, bought to try and control the infla-
and how it helps to control and
tion rate. This leaves the Federal Adelson
balance the economy.
What are open market operations Reserve a very narrow line to walk 77 years old
you might ask? Open market oper- between recession and out of con- $23.3 billion
ations are the buying and selling of trol inflation at all times. However Casinos
government bonds by a central the men and women who research,
bank, in our case the Federal Re- advise, and eventually make these
serve. The idea of open market decisions, are very qualified and
operations is to control the interest
know what to look for and what
5
rates and money supply in an
measures to take in certain circum-
Charles
economy. There are different fac-
tors that can guide how and what stances. I believe that it is im- Koch
decisions are made. Those factors portant to keep the faith in the peo- 75 years old
being the rate of inflation, interest ple who run the Federal Reserve as $22 billion
rates, and exchange rates. An ex- they have taken the necessary Diversified
ample would be the buying and steps to help put us on the path out
selling of government bonds. If the
of the recent recession.
economy was up and there was lots

7. Page 7

8. Page 8
Inter view: Paul Nardone
By: Tyann McDaniel
Is the Economy Affecting Local Businesses?
Paul Nardone is not only a Professor in the
Business Department at Misericordia Uni How long has Outrageous been in business?
versity, but he also manages a Small Busi -We have been in business for 10 years. Alt-
ness called “It’s Outrageous– LLC”. I had hough we go by the trade name Outrageous –
the opportunity to interview him about how the actual business name is It’s Outrageous,
he came upon owning the business and how LLC.
he is dealing with the current status of the
economy. What is your role in the business?
-I have performed every role in the business
When did you decide you wanted to become over the years. As an entrepreneur you wear
an entrepreneur? many hats. My role has changed over
-I always had an interest in the the years, however. I now spend
possibility of running my most of my time working on the
own business one day. I strategy and brand identity of
did not actually act on that the business. Even though
until I was in my mid to we have been around for 10
late 30’s. However, for years we are still determin-
every job/position I have ing and making changes
held over the years work- every day that better posi-
ing for someone else, I al- tion us in the marketplace.
ways approached the job
with an entrepreneurial spirit. Why did you first decide to start
up in Dallas, PA?
What made you want to start-up your own -At first my sister ran the day-to-day operation
business? of the business. She lives in Shavertown so the
-For me the opportunity was by chance, seren- location of the store was selected based on ge-
dipitous. My sister and I made the decision to ography. It was convenient for her to get to and
open our retail business on a whim. I had just from work. We also liked the opportunity in the
left my employer of 15 years and was looking Back Mountain: good customers, loyal Back
for something to do. I had the time and money Mountain following, and good traffic on the
so opening the business just made sense at the highway. These are some of the reasons.
time.
When/Why did you change locations of Out-
Why did you decide to go into the retail busi- rageous?
ness? -We decided that the location in Wilkes-Barre
-My mom was in retail for over 30 years so I was more in line with our new brand strategy.
grew up in retail stores. Did inventory when I We were looking for more foot traffic and a
was ten or eleven years old etc.. I guess retail younger demographic. Downtown Wilkes-
was just in my blood. Barre, with the University and College, seemed

9. Page 9
Continued...
http://www.facebook.com/outrageous.shavertown
How has the recession affected Outrageous?
-People are just not spending money these
days. Sales have been impacted, but we have
incorporated a new line of 3 for $10 items to
help drive sales during this challenging time.
We have also tightened up our inventory and
have worked tirelessly on controlling and re-
ducing costs.
How do you feel about the future of your
business?
-We are encouraged by the slight improve-
ment in the economy. We are also excited and
to provide both of these opportunities. encouraged by some of the changes we have
made to our brand strategy and product selec-
Has business improved since your move? tion strategy
-We are still in the first year since the move. I
would say that business has been “flat”. I do Are you looking to open another business
not yet see any increase or significant decrease elsewhere?
in business since the move. Aside from the -No plans to open another brick-and-mortar
move, which definitely has forced us to start store. We are working on our e-commerce
over in our new location, we are also dealing strategy. We need to capitalize on the oppor-
with a slowly improving economy. tunity to sell online.
Do you see any trends of when sales in What market do you think is the most pros
crease/decrease? pering today?
-As with most boutique businesses, the holi- -I believe that the technology industry is grow-
days are definitely a significant time for us in ing rapidly – especially including “green”
terms of revenue. We do more than 50% of our technologies and mobile technology.
total annual business in the months of Novem-
ber and December. If you were to open a new business today,
what would it be and why?
What do you think accounts for your busi- -I believe my desire would be to open a small
ness being successful? business consulting firm, working with small
-I think our driving success factors include our businesses on developing brand strategies that
high level of customer service/experience, our set them up for success. I would also consider
pricing model and our selection of “different” an opportunity in mobile technology.
items.

10. Page 10
Financial Cr isis
By: Jordan Wollenberg
The Recession and the Obama Administrations’ plan to fix it!
I
n 2008 the United States was hit by a housing market handle a nationwide housing market collapse, thus
crash unlike any crash in recent memory. What was sending the banking industry into shambles and causing
so different about this crash you may ask? First of all the recession of 2008.
this crash did not just take place in a few isolated mar- The Obama Administrations’ plan coming into office was
kets, it was a nationwide housing market crash hitting all to provide a stimulus package to the Americans who
of the major housing markets. Not only did this hurt the needed it the most. There were six main points to
housing industry and those who build and remodel
Obama’s stimulus package which were as follows. First,
homes, as well as the home owners, but the banking in-
dustry also. The next question that comes to mind is to provide an immediate $250 tax cut to workers and
how the housing markets crash affects the banking in- their families. Next, to provide an immediate, temporary
dustry? Well one of the simple answers to that is when $250 bonus to seniors in their social security checks.
the housing market crashed and the value of houses Third, to provide relief to homeowners hit by the hous-
dropped, homeowners could no longer make payments, ing crisis. Along with that, Obama wanted to provide aid
and were forced to sell nowhere near the value of what to the states hit hardest by the housing crisis to avoid a
they purchased the house for. Therefore, the banks
slash in services. It also planned to expand and extend
were left the difference to make up. Another reason as
to how the banking industry got involved was through unemployment. Along with all of this was an additional
mortgage backed securities and insurance swaps. $250 tax cut to workers and an additional $250 to seniors
Mortgage backed securities are bundles of mortgages in economic conditions continued to worsen. Whether
given out by banks that are packaged and sold to invest- these measures have worked can be debated for a long
ment banks. Insurance swaps go right along with mort- time, and would consume a lot more space than I have to
gage backed securities, because they are just what they do this article in. However a few things that can be said
imply; insurance on those mortgage backed securities.
is that the stock market climbed over 13,000 points this
Now when the housing market crashed and those mort-
gage backed securities began to fail, those who had year for the first time since the recession. On the other
purchased them and had insurance on them went look- side though unemployment is still at 8.3 % down from
ing for the insurance payments. However, the problem the 10% it was in October of 2010, but still almost double
was that when the insurance swaps occurred, those who the 4.8% it was in February of 2008.
were responsible for paying out the insurance could not
“Governments never learn. On-
ly people learn”
Milton Friedman, 94
Brooklyn, New York

11. Page 11
Hope on the Horizon
By: Doug Manning
O ver the past few years the economic condi-
tions in our country have been in a less than
stellar state. In fact the recession that we en-
dured starting in 2008 is considered by many to be second to only
the great depression. One may wonder how an event of this magni-
tude could not be detected and stopped before it laid ravage on THE STATS
10 years
the nation’s economy. The answer is that no one believed that all
of the United States housing markets would collapse at the same
time and they were willing to take the risk of further inflating the
housing bubble in an attempt to make a quick buck. The burst of ago the United States was ranked number
the housing bubble was preceded by a series of problematic prac- one in average wealth per adult. (Now were
tices being used by many different institutions. Some examples of 7th)
these problematic practices are things like deregulation, predato-
By 2040
ry lending, and sub-prime lending. Deregulation of many financial
practices was allowed with the beliefs that if the market was less
regulated there would be higher production and more competition
within certain industries. But what deregulation really did was al- the Chinese economy will be three times
low for risky products to be created and put into use, products like larger than the U.S. economy .
adjustable rate mortgages. Predatory lending is the use of unfair or
60%
unjust terms on the borrower during the loan origination process.
And sub-prime lending is the practice of lending to people who
have a high level of risk for default on their payments; these loans
have poor terms and higher than average interest rates. All of the- of the oil we use today is imported.
se factors along with many others, paired with easy credit condi-
tions led to the United States housing plummet. The housing mar-
ket crash ultimately led to major valuation and liquidity problems
in the country’s banking system. And the failure of certain financial
institutions finally led our country into the recession. After many
$3.90
institutional bailouts and stimulus plans were put into place the is spent on Chinese goods for every $1
financial crisis ended sometime between late 2008 and early 2009. Chinese spends on United States goods.
The country after taking a major tumble was finally on the right
By 2080
track to getting back to where it previously had been. As of early
2012 the economic conditions in the United States are not great but
they are on a slow and steady course to getting the nations econo-
my back to the state it was in before the recession occurred. The
the U.S. government public debt will hit 716
country’s Gross Domestic Product is on the rise. The rise in pro-
percent of GDP.
duction has been creating more jobs for the American people and
lowering the level of unemployment nationwide. The Labor market
is finally starting to gain some strength and there has been a rec-
ognizable level of economic growth. Even sales in the struggling
U.S. auto industry are improving. They are not the numbers that
American auto-makers really wish that they could be, but in tough
36%
of the GDP is U.S. government spending.
times any improvement even a slight one can help ease the pro-
cess of surviving the cut. So even though in the recent past the out-
look for the economy of the United States was a little bit shaky, the
Country and its citizens were able to pull themselves together,
make some changes, and start the process of rebuilding from one
of the biggest financial crises ever. The ability for the Nation as a
whole to do so is what leads me to believe that there is truly hope
on the horizon.

12. Page 12
Financial Cr isis
By: Doug Manning
Price Check
H
ave you ever worked a minimum ly other goods and services. The amount of
wage job and wondered how some- money that one makes must be adjusted to the
one could possibly live off of the current level of inflation or deflation in order to
small amount of pay that you re- allow the person the same amount of buying
ceived? Minimum wage is supposed to be the power regardless of the change in prices of
baseline for what is necessary for someone to goods and services. Inflation is when there is
earn in order to obtain the goods and services too much money in an economy and not
that they need to survive, but what happens enough goods, creating a demand for what
when the prices of goods fluctuate? The mini- goods there are. Inflation allows for more pro-
mum wage is raised or lowered to reflect the duction of goods that are needed. Deflation on
change in the prices of necessary goods and the other hand is when there isn’t enough mon-
services allowing the recipient of the minimum ey in an economy and there are too many
wage to obtain the same level of goods and goods. Deflation lowers the prices of goods be-
services. The adjusting of things such as what cause there is not a high level of demand for
to make minimum wage can be done by using them, unfortunately even though prices are
one of the greatest economic indicator tools lower, you will make less and there will be an
ever, the Consumer Price Index. The Consum- increase in the level of unemployment. The
er Price Index Measures the changes in the Current inflation rate in the United States as of
price levels of consumer goods and services in January 2012 is “2.93%”. That being Said I will
the United States. The data contained in the show some examples of the differences in pric-
Consumer Price Index can be used for many es from 2008 to 2011 to show you the amount of
things but some of its most popular uses are price fluctuation that occurred over such a
finding the true values of wages, controlling short period of time. (All data is from
the prices of goods, and being used to meas- (thepeoplehistory.com/pricebasket). In 2008
ure to adjust for the effect of inflation. Now that the average cost of renting a house for a month
you know what the Consumer Price Index is was $800, in 2009 it dropped to $780, in 2010 it
you should know what types of goods it jumped to $945, and in 2011 it increased to
measures the fluctuation of prices for. The Bu- $955. In 2008 on average a gallon of gas cost
reau of Labor Statistics is the organization who $3.39, in 2009 it cost $2.51, in 2010 it ran $2.73,
decides what items and services are represent- and in 2011 it jumped to $3.89 a gallon. Finally
ed in the index. All of their decided upon items in 2008 a loaf of bread on average cost $1.68, in
are placed into one of more than two hundred 2009 $1.77, in 2010 $2.49, and in 2011 it cost
categories and these categories are then con- $1.98 a loaf. I hope these examples display to
densed into eight major groups. Those eight you the importance of the change in the price
groups being, Foods and Beverages, Housing, of consumer goods and services in the United
Apparel, Transportation, Medical Care, Recre- States.
ation, Education and Communication, and final-

13. Page 13
Meet the Editors
By: Doug Manning
Tyann McDaniel Adam Grzech
Managing/Art Editor Technologist
Bellefonte, PA Mountaintop, PA
Junior Junior
What are some of your hobbies What are some of your hobbies
and interests? and interests?
I enjoy basketball and skiing. I’m I enjoy swimming, racing cars, and restoring old BMWs.
also a huge Penn State and Pittsburg Steelers fan. I love What are some of your biggest life goals?
going to the beach and traveling in general. I also enjoy I want to get my doctorate in business administration
spending time with my pets and cooking. and become the CEO of BMW North America.
What are some of your biggest life goals? What have you learned from Money and Banking
I want to graduate Summa Cum Laude from Misericordia class?
University, score 1000 points in basketball, own a suc- Class has been very informative. It has broadened my
cessful business, and eventually raise a family. perspective on the economy and what happens in the
What have you learned from Money and Banking banking industry. Particularly what transpired during
class? the market crash of 2008 within the banking industry.
I’ve learned about the recession and market crash of Additional things I have learned are inflation vs. defla-
2008 and what caused it to happen, how the stock mar- tion, what effects market prices, and the different func-
ket works, why interest rates fluctuate, how supply and tions of what a bank is able to accomplish.
demand impacts the economy, the housing market and
how it works, the qualities of money and how it is a force
multiplier with future and present value, and the impacts
of inflation and deflation and how they work.
Jordan Wollenberg Doug Manning
Reporter Biography Editor
Towanda, PA Tunkhannock, PA
Junior Junior
What are some of your hobbies What are some of your hobbies
and interests? and interests?
I like playing Golf and Basketball. I also love watching I like playing basketball, the drums, hiking, and spend-
football, going boating, water sports, and being out- ing time in the great outdoors.
doors. What are some of your biggest life goals?
What are some of your biggest life goals? My biggest short term goal is to graduate from Miseri-
My major goals are to graduate from Misericordia Uni- cordia University with a masters degree in business ad-
versity with a degree in Business Administration and ministration. My biggest long term goal is to open my
possibly an MBA. I would also like to own my own busi- own businesses in the hospitality industry (Most likely
ness. hotels).
Do you believe that money and banking is an im- What have you learned from Money and Banking
portant part of your learning experience? class?
I feel that money and banking is one of the most im- I have learned from our money and banking course that
portant classes I have ever taken in my life. It is very our country’s financial system has worked in the past
helpful to understand the world we live in and how eve- and in the present and about the problems, risks, and
rything works. advantages to the way that our country’s financial sys-
tem functions.