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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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Tuesday, May 06, 2008
Honeywell Develops Material to Protect Photovoltaic Solar Cells in Tough Environments
Comtex
MORRIS TOWNSHIP, New Jersey, May 06, 2008 (PR Newswire Europe via COMTEX News Network) ----Helps meet growing demand for solar energy in Europe, Asia
Honeywell (NYSE: HON) announced today it has developed a new material to protect photovoltaic (PV) solar cells in tough environments.
The new product, called Honeywell PowerShield(TM) PV325, is a material that protects PV modules -- including their critical components that convert sunlight into electricity -- in all types of environments such as humid conditions. It is UV-, moisture- and weather-resistant, and designed to also withstand the electrical load produced by the modules, which can operate at up to 1,000 volts of electricity.
Honeywell PowerShield was developed primarily for rigid PV modules, which are specifically designed to feed power into a utility or local power grid. The modules, which typically have a 25-year lifespan, serve as a reliable energy source during utility-based power outages and can offset high-peak electrical demands and associated costs.
"Initial results from independent performance testing have shown this backing material meets the demanding needs of PV module producers," said Jeff Czarnecki, global business director for Honeywell's specialty films segment, a part of the Performance Products business. "We expect our barrier material to be certified under the industry's performance-based standard by the end of the year."
Czarnecki said the reflective white material is based on Honeywell's high-performance barrier film technology. Honeywell PowerShield has a five-layer design that includes two outer protective layers based on ethylene-chlorotrifluoroethylene (ECTFE) fluoropolymer film and a core polyethylene terephthalate (PET) layer, as well as two inner bonding layers of proprietary adhesive material. It will provide PV module manufacturers with an alternative to poly-vinyl fluoride backing materials.
Demand for solar energy is growing in parts of Asia and Europe, where subsidies enable customers to receive money per kilowatt of energy sold back to the grid. The global photovoltaic industry generated about US$17 billion in revenues in 2007, according to Solarbuzz(TM), an international solar energy research and consulting company.
Honeywell has a history of innovation in high-performance transparent barrier films. In addition to Honeywell PowerShield PV325, Honeywell manufactures Aclar(R) fluoropolymer film for pharmaceutical blister packaging; Capran(R) biaxially oriented nylon film, also known as biaxially oriented polyamide (BOPA) film; Capran(R) heat stabilized nylon film; Aclon(TM) fluoropolymer resins, which provide the highest moisture barrier of any clear thermoplastic resins; and Honeywell PCTFE and PMP barrier films for industrial applications.
Honeywell also offers solar panel installation sales and services, and was a supporting sponsor of the 2007 Solar Decathlon, an international competition managed and fully sponsored by the U.S. Department of Energy.
For customer inquiries, please visit www.honeywellpowershield.com for more information on Honeywell's backing material for PV modules.
Honeywell Specialty Materials, based in Morristown, N.J., is a US$4.9 billion, global leader in providing customers with high-performance specialty materials, including fluorine products; specialty films and additives; advanced fibers and composites; intermediates; specialty chemicals; electronic materials and chemicals; and technologies and materials for petroleum refining.
Honeywell International is a US$37 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London and Chicago Stock Exchanges. For additional information, please visit www.honeywell.com.
This report contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on management's assumptions and assessments in light of past experience and trends, current conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Our forward-looking statements are also subject to risks and uncertainties, which can affect our performance in both the near- and long-term. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.
Web site: http://www.honeywell.com http://www.honeywellpowershield.com
Robert Donohoe, +1-973-455-4114, robert.donohoe@honeywell.com, or Sabine Chmielewski, +49-5137-999-9411, sabine.chmielewski@.honeywell.com
Copyright (C) 2008 PR Newswire Europe
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