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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 04, 2008
Clickatell Provides SMS Mobile Alerts for CNN Coverage of 2008 Beijing Games
Comtex
REDWOOD CITY, Calif., Aug 04, 2008 /PRNewswire via COMTEX/ ----Clickatell (http://www.clickatell.com), leading provider of global mobile messaging solutions, today announced that CNN (http://www.cnn.com) International is trusting Clickatell to bring mobile SMS coverage of this month's Beijing Olympic Games to fans around the world. Clickatell has worked with CNN since 2007 to provide a broad range of news via SMS alerts, and is now powering the CNN Beijing 2008 SMS gold medal alert service.
Available now, fans can register from their mobile phones by logging onto the CNN mobile site at http://cnnmobile.com/beijing08 and clicking on "alerts" to begin the registration process. Alternatively, fans can send an SMS text message to +447800001266 and enter the two letter country code of their choice.
"Given our positive experience with them on our existing breaking news alert service, Clickatell was the natural choice to handle CNN's Beijing 2008 Gold Medal alerts," says Laurel Chamberlain, Director of Digital Media for CNN International. "The broad global reach of Clickatell's carrier-grade messaging infrastructure will enable us to reliably reach people around the world during this summer's Beijing Olympic Games."
More than four billion TV viewers are expected to tune into the Beijing Olympic Games - many of whom can be reached by mobile phone. Roughly two billion of the planet's mobile phone users are active users of SMS text messaging.
"The Olympic Games give us all a chance to be a part of the global community - the whole world watching with a hopeful outcome in mind. Clickatell focuses on connecting many types of communities with trusted global brands. Many organizations are utilizing the mobile channel to capture new markets and segments," said Pieter de Villiers, CEO of Clickatell. "This is yet another example where a leading brand such as CNN is taking relevant information directly to its audience in real-time. We're seeing a definite trend where leading companies are embracing mobile and text messaging as a compelling communication channel across multiple industries - especially financial services, social media, healthcare, retail, government, and more."
The free gold medal alert service from CNN will enable fans to get real-time SMS updates with their favorite country's gold medal tally. A hyperlink within the alert will give one-click access to exclusive blogs from CNN's correspondents in Beijing, allow users to comment on the Olympics blogs, watch video round-ups of the latest sporting action, visit the events timetable, and upload images or video to CNN's user generated service, iReport.
Given the worldwide appeal of the Olympic Games and the varying time zones around the world, this mobile service will break down the barriers of time zones for many viewers who would otherwise face late nights of TV or after- the-fact online coverage to tune in to the most exciting moments of the Games.
"CNN International's innovative Breaking News and Beijing 2008 gold medal alert services are part of a much bigger trend that enterprises around the world are addressing to reach their customers on their cell phone. CNN is poised to capture a large piece of this market - working with Clickatell enables them to take advantage of this burgeoning mobile market opportunity," de Villiers continued.
About Clickatell
Clickatell (http://www.clickatell.com) enables businesses, governments and communities to leverage the ubiquity of mobile messaging to inform, alert, notify, transact, interact and share information. Delivering mobile messaging solutions (http://www.clickatell.com/solutions.php) since 2000, Clickatell is a global leader in mobile communications specializing in bulk messaging services (http://www.clickatell.com/solutions/business/bulksms.php) and SMS gateway (http://www.clickatell.com/products/sms_gateway.php) connectivity to small, medium and large enterprises in a variety of vertical markets. Clickatell's multi-modal capability and worldwide coverage (http://www.clickatell.com/pricing/basic_coverage.php) gives organizations the power to deliver any message to any device anywhere in the world. Reaching more than 700 networks in more than 200 countries, Clickatell serves 8,300 customers including Barclays Bank, BBC, Continental Airlines, CNN, First National Bank, Metropolitan Life, Oracle, Shell, and other industry leaders. Clickatell products and services (http://www.clickatell.com/products.php) increase customer acquisition, improve loyalty and build trusted brands through direct, personal, easy, and immediate communications. A Sequoia-backed company, Clickatell is headquartered in Redwood City, CA, and has offices in South Africa. For more information, please visit: http://www.clickatell.com/central/campaigns/redir.php?cid=41314
SOURCE Clickatell
http://www.clickatell.com
Copyright (C) 2008 PR Newswire. All rights reserved
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