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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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Wednesday, May 07, 2008
Fleet Management Solutions One of Top Ten Companies to Watch
Comtex
SAN LUIS OBISPO, Calif., May 7, 2008 /PRNewswire via COMTEX News Network/ ----In recognition of its success to date and potential within the markets it serves, Fleet Management Solutions (FMS) has been selected as one of the Ten Companies to Watch by the Pacific Coast Business Times during its annual analysis of companies within the Ventura, Santa Barbara and San Luis Obispo County region. The Business Times puts FMS into a corporate elite class of companies who are likely to achieve 101 One Hundred status in the near future. The 101 One Hundred is their annual list of the top market capitalization public and revenue producing private companies in the tri-county region.
FMS has become a global leader in the design, manufacturing, distribution and support of GPS and all-satellite asset tracking and monitoring systems. Serving customers from the Federal Government to multi-national corporations operating around the world, FMS has built a culture of efficiency, quality and focus.
Recently selected to appear and present at the Economic Vitality Corporation (EVC) Venture Capital event, FMS has shown consistent and quality growth during its first six years of operation. Mike Manchak, EVC President and CEO said, "It is great to see FMS selected for the Business Times Companies to Watch list. It is yet another sign of the quality of technology companies that are being founded and developed in San Luis Obispo County."
Previously named number 232 on the 26th annual Inc. 500 list of the fastest-growing U.S. private companies, Cliff Henley, CEO said, "It was exciting to be named as one of the most innovative and dynamic companies in the nation by Inc. magazine last year, but the local recognition among our friends and neighbors as one of the ten Companies to Watch is a real pleasure and a compliment to our team efforts on a daily basis."
FMS will be honored by the Pacific Coast Business Times at a special awards ceremony at the Four Seasons Resort in Santa Barbara on May 15th. This is the 7th year for the 101 One Hundred Awards.
About Fleet Management Solutions
Fleet Management Solutions, Inc. (FMS) combines GPS technology with two-way satellite communications to design, manufacture and deliver complete fixed and mobile asset tracking and management systems. Turnkey solutions provide customers with measurable improvements in asset utilization, safety and security, and labor productivity while reducing the risk of theft and cost of recovery.
FMS products primarily benefit medium to large fleets within the Energy, Construction, Government, Military and Heavy Equipment industries.
Founded in 2002, FMS is headquartered in San Luis Obispo, CA, and has customers and distribution partners in more than 50 countries worldwide. For more information, visit the FMS website at http://www.fmsgps.com.
About Pacific Coast Business Times
Publishing since March 17, 2000, the Pacific Coast Business Times is the business journal for Ventura, Santa Barbara and San Luis Obispo counties. With five full-time staff covering the financial news, it is the most comprehensive weekly business source in the region. Locally owned, the Business Times has offices in downtown Santa Barbara and is locally printed and delivered to subscriber offices and retail outlets each Friday.
About the Economic Vitality Corporation
Established in 1994, the Economic Vitality Corporation is the primary provider of economic development services and business resources in San Luis Obispo County and each of its seven cities. Funded by local private and public sectors, sponsors of the EVC are used to help support the mission, including helping to start and grow businesses in the County.
SOURCE Fleet Management Solutions
http://www.fmsgps.com
Copyright (C) 2008 PR Newswire. All rights reserved
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