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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
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Monday, May 19, 2008
Association of Hispanic Advertising Agencies (AHAA) Rallies Industry Leaders to Tackle Portable People Meter (PPM) Challenges
Comtex
MIAMI and McLEAN, Va., May 19, 2008 /PRNewswire-USNewswire via COMTEX/ ----AHAA Chairman Jose Lopez-Varela Announces Members of PPM Council
In the wake of swirling opinions and concerns over the preliminary ratings of Hispanic radio audiences using Portable People Meters (PPM), the Chairman of the Association of Hispanic Advertising Agencies (AHAA) Jose Lopez-Varela announced today the members of the newly formed AHAA Council on PPM. These industry leaders, representing Hispanic radio broadcasters and Hispanic-specialized agencies and led by Isabella Sanchez, vice president and managing director of Tapestry, will assess the issues and opportunities with the new electronic measurement system. The Council is tasked with ensuring that the methodology and design of the Hispanic sample accurately represents the Hispanic population and their listening behavior.
Members of the AHAA Council on PPM were announced, and those present recognized, at the Radio Ink Hispanic Radio Conference in Miami today. Members include:
Gloria Constanza
Partner, Chief Contact Strategist - d. Exposito & Partners
Jim Irvine
Sr. Director of Media Strategies - Lopez Negrete Communications
Tracy Decker
EVP, Media Director - GlobalHue
Tomas Ruiz
Director of Media Buying - Bromley Communications
Nancy Tellet
VP, Director of Media & Strategic Planning - Siboney
Oswald Mendez
Managing Partner, Integrated Communications - The Vidal Partnership
Jeanette Millan
Activation Director - MV 42��
Lula Olmedo
Media Director - Zubi Advertising
Raul Lopez
President - Phoenix Multicultural
Jeff Lieberman
President, Radio Division -Entravision
Ceril Shagrin
Senior Vice President, Corporate Research - Univision
Belia Jimenez
Director, Multicultural Research - ABC Radio Networks
Kathleen Bohan
VP, Research & Marketing - Univision Radio
Pio Ferro
National Program Director - Spanish Broadcasting System (SBS)
Stacie de Armas
Director, Office of Multicultural Business Affairs - Arbitron
Bob Patchen
Chief Research Officer - Arbitron
"We've assembled a team of Hispanic advertising and media heavy hitters that understand the critical importance of moving to electronic measurement while maintaining the integrity of our market," says Lopez-Varela. "The preliminary launch of PPM resulted in enormous declines in Hispanic radio audience size, station rankings, and time Hispanics spent listening to their favorite stations. Members of our industry have cited multiple flaws in the methodology, measurement (exposure to radio signal versus preference), design and implementation which all will be addressed by the AHAA Council on PPM."
Next steps for the Council will be a meeting of all representatives to lay out the concerns in-depth and begin developing a path to effective adoption of the new rating system. "Without reform, PPM implementation could have serious consequences for the Hispanic advertising and media industry," says Sanchez. "The Council will be a forum to unite our issues, identify problem areas and try to create resolution that will benefit everyone."
Lopez-Varela chose to make the announcement at The Radio Ink Hispanic Radio Conference following a panel discussion in which both he and Sanchez participated. The Radio Ink Hispanic Radio Conference is the only conference dedicated solely to Hispanic radio and focuses on the issues, challenges and opportunities that Hispanic radio broadcasters face in serving their communities and their advertisers. "PPM is a hot topic at the conference and we want to ensure our media partners that AHAA is taking bold steps to ensure we are connected on this issue."
About AHAA :
The Association of Hispanic Advertising Agencies (AHAA) is the national organization of firms that specialize in marketing to the nation's more than 46 million Hispanic consumers, the most rapidly growing segment of the American population. AHAA promotes the strength of the Hispanic marketing and advertising industry to the private and public sectors. AHAA agencies offer a unique blend of cultural understanding, market intelligence, proven experience and professionalism that deliver Hispanic market success for clients. AHAA agencies help organizations gain market share, increase revenue and grow profits by building the bridges and delivering the messages to reach America's Hispanic consumers, who together have an estimated buying power of nearly $1 trillion. Visit www.ahaa.org for more information.
SOURCE Association of Hispanic Advertising Agencies
http://www.ahaa.org
Copyright (C) 2008 PR Newswire. All rights reserved
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