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, July 01, 2008

Covanta Holding Corporation To Host Second Quarter Earnings Conference Call on July 30, 2008

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Comtex

FAIRFIELD, N.J., July 1, 2008 /PRNewswire-FirstCall via COMTEX/ ----Covanta Holding Corporation (NYSE: CVA) will host a conference call at 8:30 AM (Eastern) on Wednesday, July 30, 2008 to discuss its second quarter results. The Company will release its financial results for the second quarter after the market close on Tuesday, July 29, 2008. In addition, Covanta will make supplemental information available on July 29, 2008 prior to the call. The documents will be available in the Investor Relations section of the company's website at www.covantaholding.com.

Prepared remarks will be followed by a question-and-answer session. To participate, please dial 877-604-9675 approximately 10 minutes prior to the scheduled start of the call. If you are calling from outside of the United States, please dial 719-325-4873. The conference call will also be webcast live on the Investor Relations section of the Covanta website.

A replay of the conference call will be available from 11:30 AM (Eastern) Wednesday, July 30, 2008 through midnight (Eastern) Thursday, August 7, 2008. To access the replay, please dial 888-203-1112 or, from outside of the United States 719-457-0820, and use the replay pass code: 9091411. The web cast will also be archived on www.covantaholding.com.

About Covanta Holding

Covanta Holding Corporation, a New York Stock Exchange listed company, is an internationally recognized owner and operator of energy-from-waste and renewable energy projects. Covanta's energy-from-waste facilities convert municipal solid waste into renewable energy for numerous communities, predominantly in the United States. As a world premier operator of large-scale energy-from-waste facilities, Covanta is proud to offer an environmentally sound solution to communities' solid waste disposal needs. With 37 energy- from-waste facilities worldwide, Covanta uses municipal solid waste as a fuel to generate clean, renewable energy. Covanta's modern energy-from-waste facilities safely and securely convert 15 million tons of waste into more than 8 million megawatt hours of clean renewable electricity each year and create 10 billion pounds of steam that are sold to a variety of industries. For more information, visit www.covantaholding.com.

SOURCE Covanta Holding Corporation

http://www.covantaholding.com

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