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, July 21, 2008

BellwetherReport.com Analyst Report on KFT, TKR, LVS and HES

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TORONTO, Jul 21, 2008 (MARKET WIRE via COMTEX) ----BellwetherReport.com is the leading online financial newsletter for investors seeking top independent and unbiased research. Investors seeking free and unbiased analyst opinions on the companies mentioned in this release are encouraged to sign up to www.bellwetherreport.com for a free subscription to access these reports. Today, we have once again scheduled interviews with a number of the top analysts in North America to get an update feedback from them regarding the current market activity and position of Kraft Foods Inc. (NYSE: KFT), The Timken Company (NYSE: TKR), Las Vegas Sands Corp. (NYSE: LVS) and Hess Corporation (NYSE: HES).

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All analyst reviews will be posted for free under "today's articles" within 24 to 48 hours of the interview being completed.

Each interview will vary and may include, but will not be limited to the following:

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Members are also given the opportunity to receive a free "custom stock review" on any equities you currently hold in your portfolio. Simply sign up, and in the members section of www.bellwetherreport.com, you can ask an analyst for his or her opinion of any stocks you currently have in your portfolio by filling out the form under the tab "custom stock review."

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   As of Thursday, 07-17-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated a
   DOWNTREND on 05-30-2008 for HES @ $120.63. As of Thursday, 07-17-2008 23:59, the latest Comtex SmarTrend Alert, an automated
   pattern recognition system, indicated a DOWNTREND on 06-12-2008 for KFT @ $30.87. As of Thursday, 07-17-2008 23:59, the latest
   Comtex SmarTrend Alert, an automated pattern recognition system, indicated a DOWNTREND on 02-28-2008 for LVS @ $85.40. For
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