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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, August 18, 2008
Britain's Singing Sensation Connie Talbot Comes to America
Comtex
ALBANY, N.Y., Aug 18, 2008 /PRNewswire via COMTEX/ ----Connie Talbot -- remember the name. Many millions have come to know not just her name but also her amazing voice during the brief time since Talbot was the captivating runner-up in the 2007 season of the U.K.'s top-rated "Britain's Got Talent" TV show. The precious, 7 year-old singer has since become a best-selling international recording artist, and her unaffected charm and aplomb have won the hearts of music lovers and the media. The stunning preternatural singing talent that has made Talbot a star now arrives stateside as AAO Music/Reality releases her debut album, Over The Rainbow in the U.S. on September 30.
Talbot's UK debut (Rainbow Records) went gold a mere three weeks after being released in Great Britain, and has since surged to platinum in U.K. sales. According to the Guinness Book of World Records, Connie now holds the distinction of two titles: the youngest artist ever to make the British charts and the youngest ever to earn a gold record.
The euphoric response by "Britain's Got Talent" viewers and judges alike (including the notoriously crusty Simon Cowell) quickly spread beyond the U.K. to the rest of Europe and throughout Asia. Recent tours include stops in South Korea (where her album has gone double platinum), Singapore, Hong Kong, and Thailand. She was also honored to perform at the prestigious Nelson Mandela Children's Fund (U.K.) Annual Gala Dinner in London.
Plans for a Nintendo Wii Karaoke game "Sing Along with Connie," have been announced and production has been completed. Scheduled to be released in early 2009, the console game will feature 15 tracks from "Over The Rainbow." In the game, players will be able to sing along with Connie in karaoke mode, or with other friends and family members in multi-player fun.
Britain's Channel 4 has hailed Talbot as "the next Charlotte Church," resulting in Talbot becoming a popular television attraction. Recent appearances include Nickelodeon U.K. and Eire (Ireland). She has also to-date appeared on many major British TV shows as well as programs in Germany, Poland, Japan, Singapore, and Hong Kong -- where she performed a verse of "Over The Rainbow" in sign language.
Over The Rainbow features Talbot singing such time-honored vocal standards as "Over The Rainbow," "My Favorite Things," "What A Wonderful World" and "I Will Always Love You" as well as contemporary hits like John Lennon's "Imagine" and Bob Marley's "Three Little Birds" (for which she shot the video in Marley's native Jamaica). The single for "Three Little Birds" recently entered the U.K. Independent Singles Chart.
Talbot says that singing is her favorite thing to do, and cites her album's title tune as the song she loves best because she would sing it with her late grandmother as they watched their favorite movie, "The Wizard of Oz." Despite the sensation she has stirred around the globe, Talbot remains a normal primary school student in Streetly, Walsall in the English West Midlands. But with her eighth birthday coming in November, Connie Talbot is already well on her way to a lifelong musical career and international stardom.
SOURCE AAO Music/Reality
Copyright (C) 2008 PR Newswire. All rights reserved
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