Stock Market Game Week in Review

The Stock Market Game is a curriculum-based teaching tool that allows students to invest a hypothetical $100,000 online stock portfolio to learn about long-term saving and investing.

Let's start with the good news. One of the worst months ever on Wall Street came to a close. And, it's Halloween weekend. The economy may be in a sorry state, layoffs are increasing by the day and home foreclosures continue to rise, but at least there are trick-or-treaters, and our bellies are full of candy, helping to keep our minds off our troubles.

But back to the doom and gloom. Wednesday (Oct. 29) marked the 79th anniversary of "Black Tuesday" or the crash of 1929. It was one of the biggest market crashes ever, and it led to the beginning of the Great Depression. As mentioned last week, many economists are confident we are not on the verge of another depression, but the month of October has been quite the roller-coaster ride with the Dow posting one of its worst months in history.

Also this week, the Federal Reserve cut a key short-term interest rate by half a percentage point. Wednesday's rate cut put the central bank's federal funds rate at 1% -- matching its lowest level ever, which was from June 2003 to June 2004.

The federal funds rate is used to set rates for a variety of consumer loans, including home equity lines of credit and credit cards, as well as for many business loans. The lower the rate, the more the Fed hopes to spur economic activity.

Unfortunately, things are a bit different in this economic climate. Banks are not excited about lending money now -- to anyone. They have become more concerned with people's inability to pay them back. Even healthy banks like JP Morgan Chase(JPM Quote), Wells Fargo(WFC Quote), and Bank of America(BAC Quote) are leery of resuming their lending and as JP Morgan Chase's CEO, Jaime Dimon, stated earlier this month, "If you're not fearful, you're crazy."